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Chegg
(NYSE:CHGG)
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Rating:46Neutral
Price Target:
$0.88
▼(-4.13% Downside)
Action:Reiterated
Date:07/09/26
CHGG scores below average primarily due to weak financial performance (revenue declines, losses, and TTM cash burn) and bearish technicals (below key moving averages with negative MACD). The earnings call provides a partial offset with improved cost discipline, debt paydown plans, and guidance pointing to better free cash flow, but execution risks and ongoing Academic Services traffic headwinds keep the overall score constrained.
Positive Factors
Sustained OPEX reduction
A 55% YoY reduction in non-GAAP OPEX reflects a structural cost reset and adoption of AI-driven efficiencies. Lower fixed and recurring expenses reduce the cash needed to operate, improve operating leverage durability, and materially raise the probability of sustaining profitability as revenue stabilizes.
Negative Factors
Persistent revenue and profitability weakness
Trailing revenues have contracted materially and operating profits are negative, reducing operating leverage. Continued top-line erosion limits the company's ability to absorb fixed costs and makes recovery dependent on durable revenue stabilization or faster skilling scale to restore margins.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained OPEX reduction
A 55% YoY reduction in non-GAAP OPEX reflects a structural cost reset and adoption of AI-driven efficiencies. Lower fixed and recurring expenses reduce the cash needed to operate, improve operating leverage durability, and materially raise the probability of sustaining profitability as revenue stabilizes.
Read all positive factors
Chegg Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes income from different business areas, highlighting which segments drive growth and where the company might focus future efforts.
Analyzes income from different business areas, highlighting which segments drive growth and where the company might focus future efforts.
Data provided by:
The Fly
The FlyChegg (CHGG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$95.56M
Dividend YieldN/A
Average Volume (3M)1.37M
Price to Earnings (P/E)―
Beta (1Y)2.39
Revenue Growth-43.54%
EPS Growth90.44%
CountryUS
Employees564
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)-0.79
Shares Outstanding111,958,840
10 Day Avg. Volume1,067,538
30 Day Avg. Volume1,367,347
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)0.84
Price to Sales (P/S)0.27
P/FCF Ratio-7.91
Enterprise Value/Market Cap1.40
Enterprise Value/Revenue0.42
Enterprise Value/Gross Profit0.68
Enterprise Value/Ebitda10.09
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)-0.13
Revenue Forecast (FY)$202.25M
Chegg Business Overview & Revenue Model
Company Description
Chegg, Inc. is an educational technology company that provides a direct-to-student learning platform. Its purpose is to assist students throughout their academic studies and into their professional lives, offering resources designed to deepen thei...
How the Company Makes Money
Chegg primarily generates revenue from direct-to-consumer subscriptions to its digital learning services. Users typically pay recurring fees (e.g., monthly/term subscriptions) to access features such as study support tools and on-demand academic a...
Chegg Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 10, 2026
Earnings Call Sentiment Positive
The call conveyed a largely positive tone driven by stronger-than-expected Q1 financials (positive net income, $15.5M Adjusted EBITDA, significant OPEX and CapEx reductions), clear progress on debt reduction and cash position, and momentum in the AI-first skilling strategy with new enterprise partnerships. Key risks remain short-term: search-driven traffic headwinds to Academic Services, sizeable severance-related cash outflows, and the need for successful execution of partner rollouts to scale skilling revenue. On balance, the positives around profitability, cost discipline, partnerships, and AI-driven product differentiation outweigh the near-term headwinds.Positive Updates
Revenue and Profitability Beat
Q1 results exceeded expectations across revenue, profitability, and free cash flow; company reported positive net income for the first time in two years and Adjusted EBITDA of $15.5M (24% margin).
Negative Updates
Search Traffic Headwinds
Search headwinds continue to impact traffic for Chegg Study, creating pressure on top-line Academic Services growth despite strong retention.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue and Profitability Beat
Q1 results exceeded expectations across revenue, profitability, and free cash flow; company reported positive net income for the first time in two years and Adjusted EBITDA of $15.5M (24% margin).
Read all positive updates
Company Guidance
Chegg’s Q2 guidance calls for Chegg Skilling revenue of $17.5–$18.0M, total revenue of $49–$50M, gross margins of 51%–52%, and adjusted EBITDA of $5–$6M; for 2026 the company expects double‑digit skilling revenue growth with back‑half acceleration and meaningful free cash flow, is targeting a 60% reduction in CapEx this year (Q1 CapEx was $1M, down 88% YoY) with ~90% of CapEx focused on skilling, and plans to fully repay its convertible debt by September while continuing to evaluate share repurchases. Key Q1 metrics cited that underpin the outlook include Skilling revenue of $17.6M (up 9% YoY), Academic Services revenue of $45.7M, non‑GAAP operating expenses of $36.4M (down $44.1M or 55% YoY), adjusted EBITDA of $15.5M (24% margin), Q1 free cash flow of $3.1M (which included ~$12.9M of severance with an additional ~$2.1M expected in Q2), cash and investments of $67.9M, and a net cash position of $34.1M.Chegg Financial Statement Overview
Summary
Income Statement
27
Negative
Balance Sheet
58
Neutral
Cash Flow
35
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 318.78M | 376.91M | 617.57M | 716.29M | 766.90M | 776.26M |
| Gross Profit | 197.33M | 226.86M | 436.65M | 490.35M | 569.50M | 521.36M |
| EBITDA | 13.23M | -20.91M | -607.43M | 183.80M | 201.59M | 86.77M |
| Net Income | -85.71M | -103.42M | -837.07M | 18.18M | 266.64M | -1.46M |
Balance Sheet | ||||||
| Total Assets | 244.10M | 276.82M | 868.95M | 1.73B | 2.47B | 2.92B |
| Cash, Cash Equivalents and Short-Term Investments | 65.91M | 72.82M | 315.72M | 330.01M | 1.06B | 1.55B |
| Total Debt | 51.77M | 84.17M | 504.46M | 624.74M | 1.21B | 1.70B |
| Total Liabilities | 122.96M | 157.20M | 675.97M | 782.62M | 1.35B | 1.81B |
| Stockholders Equity | 121.14M | 119.62M | 192.98M | 944.62M | 1.12B | 1.11B |
Cash Flow | ||||||
| Free Cash Flow | -25.43M | -12.63M | 50.25M | 163.15M | 152.64M | 179.04M |
| Operating Cash Flow | -4.93M | 15.49M | 125.20M | 246.20M | 255.74M | 273.22M |
| Investing Cash Flow | 25.50M | 282.30M | 11.35M | 268.67M | 104.89M | -365.77M |
| Financing Cash Flow | -31.57M | -428.48M | -109.14M | -852.77M | -744.80M | 466.72M |
Chegg Technical Analysis
Negative
0.92
Price Trends
1.14
Negative
0.94
Negative
0.98
Negative
Market Momentum
-0.07
Positive
34.91
Neutral
5.37
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHGG, the sentiment is Negative. The current price of 0.92 is below the 20-day moving average (MA) of 1.04, below the 50-day MA of 1.14, and below the 200-day MA of 0.98, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 34.91 is Neutral, neither overbought nor oversold. The STOCH value of 5.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CHGG.
Chegg Risk Analysis
Chegg disclosed 47 risk factors in its most recent earnings report. Chegg reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Chegg Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.29B | 8.78 | 16.00% | <0.01% | 13.36% | 15.90% | |
64 Neutral | $1.72B | 74.30 | 11.72% | ― | 19.92% | 84.00% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | $1.64B | -15.02 | -10.06% | ― | 9.79% | 8.61% | |
55 Neutral | $1.61B | 156.88 | -3.46% | ― | 9.41% | -51.90% | |
46 Neutral | $95.56M | ― | -62.94% | ― | -43.54% | 90.44% |
* Consumer Defensive Sector Average
CHGG
Chegg
0.85
-0.50
-36.81%
LINC
Lincoln Edu
54.24
31.45
138.00%
AFYA
Afya
14.38
-0.41
-2.75%
DAO
Youdao
13.47
4.64
52.55%
COUR
Coursera
5.71
-2.62
-31.45%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.