Why Chegg Shares Are Dipping Today

Chegg, Inc. CHGG shares are trading lower following a downgrade from Needham.

What to know: Needham analyst Ryan MacDonald downgraded Chegg on Wednesday from a Buy to a Hold. The analyst believes that the full-year 2023 consensus estimate for revenue growth of 9.2% is too high and estimates 2%-3% growth for full-year 2023.

Macdonald cites long-term initiatives hindering near-term growth, including:

• Full-year 2022 Busuu growth appears to be negative, underperforming 20%+ expectations

• If subscribers were to accelerate, MacDonald expects it to come from ARPU-dilutive international markets, canceling out revenue upside

• Investments in new offerings may limit incremental leverage in 2023

Chegg Inc is an American educational services company specializing in textbook rentals, course assistance, and online tutoring.

According to data from Benzinga Pro, Chegg Inc. was down 15.2%, trading at $20.73 at the time of publication. It has a 52-week high of $37.64 and a 52-week low of $15.66