Chegg (CHGG) AI Stock Analysis

• Market Cap: $166.25M
• Dividend Yield: N/A
• Average Volume (3M): 4.11M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.60
• Revenue Growth: -19.69%
• EPS Growth: -6735.07%
• Country: US
• Employees: 1,241
• Sector: Technology
• Sector Strength: 82
• Industry: Education & Training Services
• EPS (TTM): -0.06
• Shares Outstanding: 106,570,450
• 10 Day Avg. Volume: 6,607,880
• 30 Day Avg. Volume: 4,108,555
• PEG Ratio: >-0.01
• Price to Book (P/B): 2.89
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 21.12
• Enterprise Value/Market Cap: 23.77
• Enterprise Value/Revenue: 1.56
• Enterprise Value/Gross Profit: 10.50
• Enterprise Value/Ebitda: -1.79
• 1Y Price Target: $1.00
• Price Target Upside: -31.97% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3

• Rating: 40 Underperform
• Price Target: $1.50 ▲(2.04%Upside)

Chegg's overall score reflects significant financial and operational challenges, including declining revenues, restructuring efforts, and poor technical and valuation metrics. The company's strategic initiatives may stabilize the situation, but current conditions are challenging.

Positive Factors

Business Strategy

Chegg is combating challenges with product innovation, new B2B sales initiatives, and a social media-focused marketing campaign to improve brand awareness.

International Expansion

Progress on international localization efforts could expand Chegg's market reach and customer base.

Strategic Review

Chegg has filed a complaint against Google and Alphabet and intends to explore strategic alternatives, which has the potential to unlock shareholder value.

Negative Factors

Financial Performance

1Q25 guidance for revenue and adjusted EBITDA came in materially below consensus expectations.

Market Competition

The company's AI-fueled struggles continue as Google AIO negatively impacts web traffic.

Subscriber Trends

Declining negative growth and subscribers missing expectations supported the Underweight thesis for Chegg Inc.

Chegg Business Overview & Revenue Model

Company Description

Chegg, Inc. is an American education technology company based in Santa Clara, California. It provides digital and physical textbook rentals, online tutoring, and other student services. Chegg primarily caters to college and high school students, offering a range of educational materials and resources to help with their academic and career success. The company's core products and services include textbook rentals, homework help, online tutoring, and study resources like Chegg Study, Chegg Writing, and Chegg Math Solver.

How the Company Makes Money

Chegg makes money through a variety of revenue streams. The primary source of revenue is its subscription services, which include Chegg Study, Chegg Writing, Chegg Math Solver, and Chegg Tutors. These services offer educational tools and resources on a subscription basis, providing students with access to step-by-step solutions, expert Q&A, writing assistance, and tutoring support. Another significant revenue stream is the rental and sale of textbooks, both digital and physical, which Chegg offers through its online platform. Additionally, Chegg generates revenue through advertising and partnerships with educational institutions and other companies in the education sector. These partnerships often involve integrating Chegg’s services into the educational offerings of these institutions, enhancing their reach and usability.

Chegg Financial Statement Overview

Summary

Chegg faces significant financial challenges, particularly with declining revenue and profitability. The income statement shows negative profit margins, and the balance sheet reveals diminishing financial stability. Although cash flows are positive, they are declining, underscoring the need for strategic changes.

Income Statement

The income statement reveals significant challenges with profitability. There is a negative trend in revenue with a consistent decline from 2023 to the TTM 2025 period. Both EBIT and Net Income margins are negative, indicating struggles with operational efficiency and high expenditures. The declining revenue and negative profit margins are concerning, reflecting a need for strategic adjustments.

Balance Sheet

The balance sheet shows a weakening financial position with declining total assets and stockholders' equity. The debt-to-equity ratio has improved slightly, reflecting better leverage management, yet the equity ratio has also decreased, indicating potential risks. Overall, the balance sheet highlights diminishing financial stability with significant reductions in equity and asset base.

Cash Flow

The cash flow statement reflects some positive aspects, such as a positive free cash flow, although it has decreased year over year. The operating cash flow to net income ratio is strong due to negative net income, but this underscores operational challenges. Despite positive cash flow metrics, the substantial decline in free cash flow growth raises concerns about sustainability.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
564.61M	617.57M	716.29M	766.90M	776.26M	644.34M
	Gross Profit
376.21M	436.65M	528.60M	569.50M	521.36M	438.92M
	EBIT
-763.62M	-737.11M	-67.72M	8.96M	78.11M	56.75M
	EBITDA
-664.41M	-607.43M	183.80M	105.79M	86.77M	127.85M
	Net Income Common Stockholders
-853.13M	-837.07M	18.18M	266.64M	-1.46M	-6.22M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
88.29M	315.72M	330.01M	1.06B	1.55B	1.15B
	Total Assets
438.77M	868.95M	1.73B	2.47B	2.92B	2.25B
	Total Debt
80.27M	504.46M	617.90M	1.21B	1.70B	1.53B
	Net Debt
36.17M	342.98M	482.14M	735.78M	843.19M	1.05B
	Total Liabilities
253.10M	675.97M	782.62M	1.35B	1.81B	1.64B
	Stockholders Equity
185.67M	192.98M	944.62M	1.12B	1.11B	609.63M
Cash Flow		Free Cash Flow
40.81M	50.25M	163.15M	152.64M	179.04M	155.13M
	Operating Cash Flow
96.41M	125.20M	246.20M	255.74M	273.22M	236.44M
	Investing Cash Flow
327.07M	11.35M	268.67M	104.89M	-365.77M	-732.79M
	Financing Cash Flow
-521.81M	-109.14M	-852.77M	-744.80M	466.72M	588.63M

Chegg Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHGG, the sentiment is Positive. The current price of 1.47 is above the 20-day moving average (MA) of 1.16, above the 50-day MA of 0.84, and above the 200-day MA of 1.41, indicating a bullish trend. The MACD of 0.21 indicates Negative momentum. The RSI at 65.86 is Neutral, neither overbought nor oversold. The STOCH value of 62.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CHGG.

Chegg Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LAUR	74 Outperform	$3.25B	11.60	31.14%	―	1.26%	140.30%
COUR	73 Outperform	$1.39B	―	-10.84%	―	7.26%	39.62%
UDMY	71 Outperform	$1.11B	―	-27.17%	―	5.43%	14.22%
Sector *	62 Neutral	$11.92B	10.48	-7.50%	2.95%	7.40%	-8.18%
GOTU	61 Neutral	$969.40M	―	-36.29%	―	58.34%	-602.43%
DAO	60 Neutral	$1.07B	51.52	25.15%	―	-2.04%	―
CHGG	40 Underperform	$166.25M	―	-148.48%	―	-19.69%	-6735.07%

Chegg Corporate Events

Chegg Holds 2025 Annual Stockholders Meeting

On June 4, 2025, Chegg, Inc. conducted its 2025 Annual Meeting of Stockholders. The meeting was a significant event for the company, providing insights into its strategic direction and potential impacts on its operations and stakeholder interests.

The most recent analyst rating on (CHGG) stock is a Hold with a $3.00 price target. To see the full list of analyst forecasts on Chegg stock, see the CHGG Stock Forecast page.

Chegg Announces Major Workforce Restructuring Plan

On May 12, 2025, Chegg announced a restructuring plan that involves reducing its global workforce by approximately 22%, impacting 248 employees, and other measures to streamline operations. This decision is in response to ongoing industry challenges affecting the business, such as a decline in traffic. The company expects to incur charges between $34 million and $38 million, primarily for employee transition and severance payments, with most charges anticipated by the fourth quarter of 2025. Chegg also negotiated an early termination of its Santa Clara headquarters lease, effective December 31, 2025, which will reduce lease obligations by $5.3 million.

The most recent analyst rating on (CHGG) stock is a Hold with a $3.25 price target. To see the full list of analyst forecasts on Chegg stock, see the CHGG Stock Forecast page.

Chegg Faces NYSE Delisting Notice for Low Share Price

On April 1, 2025, Chegg, Inc. received a notice from the New York Stock Exchange (NYSE) for non-compliance with the minimum share price requirement, as its average closing share price was below $1.00 over a 30-day period. The company intends to regain compliance within a six-month cure period, potentially through a reverse stock split, and will continue to trade on the NYSE during this time. Failure to comply could lead to suspension and delisting procedures.