Latest news with #CHGG
Yahoo
03-07-2025
- Business
- Yahoo
1 Momentum Stock Worth Your Attention and 2 to Question
The stocks featured in this article are seeing some big returns. Over the past month, they've outpaced the market due to new product launches, positive news, or even a dedicated social media following. While momentum can be a leading indicator, it has burned many investors as it doesn't always correlate with long-term success. All that said, here is one stock with the fundamentals to back up its performance and two not so much. One-Month Return: +11.6% Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance. Why Should You Dump CHGG? Value proposition isn't resonating strongly as its services subscribers averaged 13.4% drops over the last two years Overall productivity fell over the last few years as its plummeting sales were accompanied by a decline in its EBITDA margin Earnings per share decreased by more than its revenue over the last three years, showing each sale was less profitable Chegg is trading at $1.35 per share, or 2.3x forward EV/EBITDA. If you're considering CHGG for your portfolio, see our FREE research report to learn more. One-Month Return: +12.3% Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ:MYRG) is a specialty contractor in the electrical construction industry. Why Is MYRG Risky? New orders were hard to come by as its backlog was flat over the past two years Incremental sales over the last two years were much less profitable as its earnings per share fell by 34.5% annually while its revenue grew Waning returns on capital imply its previous profit engines are losing steam At $182 per share, MYR Group trades at 29.2x forward P/E. Read our free research report to see why you should think twice about including MYRG in your portfolio, it's free. One-Month Return: +36.1% Widely regarded as the face of crypto, Coinbase (NASDAQ:COIN) is a blockchain infrastructure company updating the financial system with its trading, staking, stablecoin, and other payment solutions. Why Will COIN Beat the Market? 58.2% annual increases in its average revenue per user over the last two years show its platform is resonating with power users Incremental sales significantly boosted profitability as its annual earnings per share growth of 64.5% over the last two years outstripped its revenue performance Robust free cash flow margin of 25.9% gives it many options for capital deployment, and its expanding margin gives it even more flexibility Coinbase's stock price of $352.25 implies a valuation ratio of 27.5x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it's free. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
Yahoo
04-06-2025
- Business
- Yahoo
CHGG Q1 Earnings Call: Revenue Decline, Cost Cuts, and Strategic Alternatives Take Center Stage
Online study and academic help platform Chegg (NYSE:CHGG) fell short of the market's revenue expectations in Q1 CY2025, with sales falling 30.4% year on year to $121.4 million. Its non-GAAP loss of $0.06 per share was significantly below analysts' consensus estimates. Is now the time to buy CHGG? Find out in our full research report (it's free). Revenue: $121.4 million (30.4% year-on-year decline) Adjusted EPS: -$0.06 vs analyst estimates of $0 (significant miss) Adjusted Operating Income: -$11.75 million vs analyst estimates of -$4.31 million (-9.7% margin, significant miss) Revenue Guidance for Q2 CY2025 is $101 million at the midpoint, below analyst estimates of $111.3 million EBITDA guidance for Q2 CY2025 is $16.5 million at the midpoint, below analyst estimates of $16.87 million Adjusted EBITDA Margin: 15.9% Services Subscribers: 3.19 million, down 1.47 million year on year Market Capitalization: $129 million Chegg's first quarter results were driven by continued declines in its core subscription business, as referenced by CEO Nathan Schultz, who cited ongoing industry headwinds and increased competition from generative AI tools. Schultz emphasized the company's efforts to diversify revenue through early-stage content licensing deals with leading technology firms and an expanding institutional pilot program. He also noted that operational restructuring and workforce reductions were implemented to address the ongoing subscriber and traffic declines affecting the business. CFO David Longo highlighted that these cost-saving measures are designed to realign Chegg's expense base with its reduced revenue outlook, following two rounds of restructuring in 2024 and further cuts announced this quarter. Looking ahead, Chegg's management signaled that persistent macroeconomic and industry challenges will continue to create pressure on revenues and subscriber growth in the near term. Schultz cautioned that 'business trends will worsen before they get better,' referencing competitive threats from large language models and changes in student behavior. The company is prioritizing diversification through content licensing, institutional sales, and investments in Busuu and Chegg Skills, both of which are expected to become more meaningful contributors. Ongoing strategic review efforts, including potential acquisition or going private, remain active, with Schultz describing early discussions with interested parties as encouraging. Cost containment and new business lines are central to Chegg's path forward. Chegg's management attributed the quarter's performance to severe subscription declines in its main business, offset by nascent revenue streams and aggressive cost reduction measures. Content licensing gains: Management highlighted two new licensing agreements with major technology companies, leveraging Chegg's proprietary question-and-answer archive. CEO Nathan Schultz noted that these deals represent a small fraction of Chegg's content library and are considered pilots, with the potential for broader adoption as large language models seek high-quality, human-verified data to train their systems. Institutional pilot program expansion: The business-to-institution (B2B) initiative grew from five to 15 university pilots over the quarter, aiming to reach 40 by year-end. Schultz explained that these partnerships use a seat-based licensing model, providing students access to Chegg's services via their institutions and addressing colleges' concerns over student persistence and graduation rates. Product and feature updates: Chegg released Solution Scout, which allows students to compare outputs from multiple AI models alongside Chegg's proprietary content, and introduced Create, an AI-powered feature enabling students to generate study material from their own classwork. These updates are designed to differentiate Chegg Study amid rising AI competition. Busuu and Skills performance: The Busuu language learning unit delivered 7% year-over-year revenue growth, with management pointing to successful AI-driven enhancements and strong B2B momentum. The Chegg Skills product entered new pilot partnerships in India and the U.S., with management forecasting positive adjusted EBITDA for both Busuu and Skills by 2026. Restructuring and cost control: Chegg announced another major restructuring, including a 22% workforce reduction and closure of U.S. and Canada offices. These actions are expected to generate $45–$55 million in savings for 2025 and over $100 million annually from 2026, following earlier cost-cutting measures in 2024. Chegg expects ongoing industry disruption, AI competition, and further cost alignment to shape its outlook for the remainder of the year. AI-driven competition intensifies: Management acknowledged that free AI-powered tools from large technology companies are eroding Chegg's direct-to-student traffic and subscriber base. Schultz specifically cited Google's AI Overviews and OpenAI's student offerings as major headwinds, signaling that these dynamics are expected to worsen before stabilizing. Revenue diversification efforts: The company aims to offset subscription declines by expanding content licensing deals and institutional contracts. Management believes these new revenue streams could become more meaningful over time but cautioned that they are in early stages and have yet to fully replace lost subscription revenues. Ongoing cost reductions: Chegg's restructuring initiatives are intended to realign its expense base with shrinking revenues. Management expects that, combined with previous cuts, these actions will significantly lower operating costs, but acknowledged that the near-term outlook remains pressured as the core business continues to contract. Looking ahead, the StockStory team will be monitoring (1) the scale and commercial impact of Chegg's content licensing agreements with additional technology partners, (2) the conversion rate of institutional pilots into longer-term contracts with colleges and universities, and (3) execution and follow-through on cost reduction plans. We will also track Busuu's ability to sustain growth and Chegg Skills' progress toward profitability. Chegg currently trades at a forward EV/EBITDA ratio of 2×. At this valuation, is it a buy or sell post earnings? The answer lies in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
08-04-2025
- Business
- Yahoo
3 Reasons CHGG is Risky and 1 Stock to Buy Instead
Chegg has gotten torched over the last six months - since October 2024, its stock price has dropped 68.4% to a new 52-week low of $0.51 per share. This was partly driven by its softer quarterly results and may have investors wondering how to approach the situation. Is there a buying opportunity in Chegg, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it's free. Even with the cheaper entry price, we don't have much confidence in Chegg. Here are three reasons why CHGG doesn't excite us and a stock we'd rather own. Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance. As a subscription-based app, Chegg generates revenue growth by expanding both its subscriber base and the amount each subscriber spends over time. Chegg struggled with new customer acquisition over the last two years as its services subscribers have declined by 10.2% annually to 3.64 million in the latest quarter. This performance isn't ideal because internet usage is secular, meaning there are typically unaddressed market opportunities. If Chegg wants to accelerate growth, it likely needs to enhance the appeal of its current offerings or innovate with new products. Investors frequently analyze operating income to understand a business's core profitability. Similar to operating income, EBITDA is a common profitability metric for consumer internet companies because it removes various one-time or non-cash expenses, offering a more normalized view of profit potential. Looking at the trend in its profitability, Chegg's EBITDA margin decreased by 10 percentage points over the last few years. Even though its historical margin was healthy, shareholders will want to see Chegg become more profitable in the future. Its EBITDA margin for the trailing 12 months was 24.2%. We track the change in earnings per share (EPS) because it highlights whether a company's growth is profitable. Sadly for Chegg, its EPS declined by 16.3% annually over the last three years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand. We cheer for all companies serving everyday consumers, but in the case of Chegg, we'll be cheering from the sidelines. After the recent drawdown, the stock trades at 0.4× forward EV-to-EBITDA (or $0.51 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are superior stocks to buy right now. Let us point you toward the Amazon and PayPal of Latin America. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
