Chegg, Inc. ($CHGG) Earnings (Q1 FY22)

Chegg, Inc. ($CHGG) Earnings and Opinion:


Chegg is a company in the Consumer Defensive sector and operates in the Education & Training Services industry. The company operates a direct-to-student learning platform. Chegg was founded in 2005 and is currently headquartered in Santa Clara, California. The company was first traded on the stock market in 2013.

Chegg EPS and Revenue (Q1 FY22):

  • EPS of $0.32 beating expectations of $0.24
  • Revenue of $202.24M missing expectations of $202.96M 
Chegg Q1 Financial Highlights:
  • Revenues grew 2% (YOY)
  • Net income of $5.7M
  • 5.4M Chegg service subscribers
  • Adjusted EBITDA of $62.2M
Opinion:
Chegg is currently taking after hours after reporting earnings after the market closed. The stock is down over 30% currently and is reaching the lowest price it has seen in 4 years. The company beat its earnings expectations but had a slight miss on revenue expectations. The amount of subscribers grew on a year-over-year basis. The revenues grew a slight bit at 2% (YOY) and the net income was reported at $5.7M. Chegg has recently acquired Bussu which will bring in 6 million or so subscribers. The company had a decently solid earnings report with some signs of growth showing. However, it was the outlook that really took a toll on the stock price. They slashed the expected numbers a little bit, which caused investors to go into a whirlwind over this stock. I do not know a lot about this company, but as a college student, this seems to be a popular company. I thought it would be interesting to do a little research on it. The company seems to have some sort of direction after the stock has been getting hammered after reaching all-time highs over $100. They have picked up some acquisitions and seems to grow subscribers, so theres not much you an complain about as an investor of them. I think with the acquisition of Bussu, they will be able to hike growth back up and it will allow for the stock price to rise up with it. I really don't know too much about this stock, so I don't have a lot of insight to give. However, I think it is definitely a risky play with high reward if everything goes right. It seems too volatile for me to hold, so I am going to pass on this company and invest elsewhere.

*Information from Chegg, Yahoo Finance, Google
*Estimates from Zacks

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