Chegg price target lowered to $18 from $25 at Craig-Hallum

Craig-Hallum analyst Alex Fuhrman lowered the firm’s price target on Chegg to $18 from $25 and keeps a Buy rating on the shares. The firm notes Chegg reported strong Q1 results, but cautioned investors that ChatGPT is having an impact on new customer signups. The company is guiding to lower-than-expected results in Q2 and indicated that going forward it will only guide one quarter out. While Craig-Hallum is "disappointed" in the lower-than-expected Q2 guidance and is lowering its estimates for the remainder of the year, the firm continues to expect the company to generate substantial free cash flow and believes there are numerous opportunities for trends to improve, including improving college enrollment, a growing international presence, and the development of Chegg’s own AI-driven product, CheggMate.