What's Going On With Chegg Stock Tuesday?

Chegg Inc CHGG shares are volatile Tuesday following the company’s quarterly results. Here’s a look at what you need to know.

What To Know: Chegg said fourth-quarter revenue decreased 8% year-over-year to $188 million, which beat the consensus estimate of $187.35 million, according to Benzinga Pro. The company reported quarterly adjusted earnings of 36 cents per share, which was in line with analyst estimates.

Subscription services revenues decreased 6% year-over-year to $166.3 million. Subscription services subscribers fell 9% year-over-year to 4.6 million.

“It’s an exciting time at Chegg and I am proud of the team, and how they have navigated through last year, as we completely reinvented the company by leveraging the advancements in artificial intelligence,” said Dan Rosensweig, president and CEO of Chegg.

“The process of embedding AI into every facet of Chegg’s platform is ongoing and iterative, as we build a truly personalized learning assistant.”

Outlook: Chegg expects first-quarter revenue to be in the range of $173 million to $175 million versus estimates of $180.29 million. Subscription services revenues are expected to be between $155 million and $157 million. Soft first-quarter guidance from the company appears to be driving much of the weakness in the stock.

Chegg also announced the appointment of David Longo as CFO, effective on Feb. 21. Longo currently serves as vice president, chief accounting officer, corporate controller and assistant treasurer of Chegg. He will succeed Andrew Brown who announced his retirement in the fall.

Following the print, Piper Sandler analyst Arvind Ramnani downgraded Chegg from Neutral to Underweight and lowered the price target from $9 to $8.50. Goldman Sachs maintained Chegg with a Sell and lowered the price target from $8 to $7.

Is CHGG A Good Stock To Buy?

When deciding whether to buy a stock, there are some key fundamentals investors may want to consider. One of these factors is revenue growth. Buying a stock is essentially a bet that the business will continue to grow and generate profits in the future.

Chegg has reported average annual revenue growth of 17.37% over the past 5 years.

It's also important to pay attention to valuation when deciding whether to buy a stock. Chegg has a forward P/E ratio of 8.34. This means investors are paying $8.34 for each dollar of expected earnings in the future. The average forward P/E ratio of Chegg's peers is 60.33.

Other important metrics to look at include a company's profitability, balance sheet, performance relative to a benchmark index and valuation compared to peers. For in-depth analysis tools and important financial data, check out Benzinga PRO.

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CHGG Price Action: Chegg shares were down 2.74% at $9.04 at the time of publication, according to Benzinga Pro.

Photo: WOKANDAPIX from Pixabay.