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Chegg Q2 Results Top Estimates; Shares Rise 3.6%
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Chegg Q2 Results Top Estimates; Shares Rise 3.6%

Shares of educational company Chegg, Inc. (CHGG) popped 3.6% and closed at $82.62 in the extended trading session on Monday after the company reported stronger-than-expected results for the second quarter ended June 30, 2021. The solid results were driven by growth in revenues.

Chegg reported quarterly net revenues of $198.5 million, up 30% from the same quarter last year, and surpassed the Street’s estimates of $189.94 million. Revenue growth was primarily driven by the company’s Services revenues, which grew 38% from the previous year to $173.5 million.

Earnings per share (EPS) stood at $0.43 for the second quarter, compared to $0.37 a year ago. It surpassed analysts’ estimates of $0.37 per share.

Also, Chegg’s subscribers grew 31% year-over-year to 4.9 million, while its total content views for the quarter stood at 367 million.

For the third quarter, the company expects net revenues to be in the range of $170 million to $175 million, while the consensus estimate for the same is pegged at $173 million. In terms of adjusted EBITDA, the company expects the same to be in the range of $43 million to $45 million.

For 2021, it anticipates revenues to be in the range of $805 million to $815 million, while the consensus estimate for the same stands at $797.2 million. Adjusted EBITDA guidance for 2021 ranges from $295 million to $300 million.

The CEO of Chegg, Dan Rosensweig, said, “Chegg had a great Q2 with total revenue growth of 30%, driven by 38% growth in Chegg Services revenue with Chegg Services subscribers growing to 4.9 million in the quarter. Our international growth also continues to be strong, and we are confident we will exceed our initial expectation of over one million international subscribers for the year.” (See Chegg stock chart on TipRanks)

Recently, Barrington analyst Alexander Paris reiterated a Buy rating on the stock with a price target of $120. The analyst’s price target implies upside potential of 50.4% from current levels.

Consensus among analysts is a Strong Buy based on 5 unanimous Buys. The average Chegg price target of $110 implies upside potential of 37.9% from current levels. Shares have declined 2.2% over the past year.

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