Chegg (CHGG) AI Stock Analysis

• Market Cap: $135.41M
• Dividend Yield: N/A
• Average Volume (3M): 3.85M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.85
• Revenue Growth: -25.87%
• EPS Growth: 57.21%
• Country: US
• Employees: 1,241
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Education & Training Services
• EPS (TTM): 0.10
• Shares Outstanding: 108,326,990
• 10 Day Avg. Volume: 2,236,540
• 30 Day Avg. Volume: 3,845,149
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.86
• Price to Sales (P/S): 0.27
• P/FCF Ratio: 3.31
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 0.25
• Enterprise Value/Gross Profit: 0.39
• Enterprise Value/Ebitda: -0.71
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

• Rating: 48 Neutral
• Price Target: $1.00 ▼(-25.93% Downside)

Chegg's overall stock score reflects significant financial challenges, including declining revenues and profitability pressures. Technical indicators suggest bearish momentum, and the valuation is unattractive due to a negative P/E ratio. While the earnings call highlighted some positive developments, such as growth in specific segments and cost savings, these are overshadowed by the broader financial struggles.

Positive Factors

Busuu B2B Growth

The strong growth in Busuu's B2B segment indicates a successful expansion strategy in corporate education, enhancing Chegg's market position and diversifying revenue streams.

Skills Business Expansion

The Skills business targets a $40 billion market, and its growth in enrollments showcases Chegg's ability to capture demand in professional upskilling, supporting long-term revenue potential.

Chegg Study Improvements

Enhancements in Chegg Study, driven by AI-powered features, improve user retention and satisfaction, solidifying Chegg's competitive advantage in educational technology.

Negative Factors

Significant Revenue Decline

A substantial revenue decline indicates challenges in maintaining market share and customer engagement, potentially impacting long-term financial stability.

Negative Free Cash Flow

Negative free cash flow suggests operational inefficiencies and financial strain, limiting Chegg's ability to invest in growth initiatives and manage debt effectively.

FTC Settlement

The FTC settlement for subscription cancellation issues highlights regulatory risks and potential reputational damage, which could affect customer trust and future revenue.

Chegg Business Overview & Revenue Model

Company Description

Chegg, Inc. is an American education technology company that provides various services to students, primarily in the higher education sector. Founded in 2005, Chegg started as a textbook rental service and has since expanded its offerings to include online tutoring, study help, and various educational resources. Its core products include Chegg Study, Chegg Tutors, and Chegg Books, among others, aimed at assisting students in learning and succeeding academically.

How the Company Makes Money

Chegg generates revenue through several key streams. The primary source of income comes from subscription services, particularly Chegg Study, which offers students access to textbook solutions, expert Q&A, and other educational resources for a monthly fee. Additionally, Chegg Tutors provides on-demand tutoring services, charging students for sessions with tutors. The company also earns revenue from textbook rentals and sales, leveraging its platform to connect students with affordable educational materials. Partnerships with educational institutions and integrations with learning management systems further enhance its service offerings, contributing to its overall revenue. Advertising and affiliate marketing also play a role in its revenue model, allowing Chegg to monetize its platform through targeted promotions and collaborations with related educational services.

Chegg Financial Statement Overview

Summary

Chegg faces significant financial challenges, with declining revenues and profitability pressures. The income statement highlights operational inefficiencies, while the balance sheet shows moderate leverage improvements. Cash flow remains positive but is under strain. The company needs to address revenue growth and profitability to improve its financial health.

Income Statement

Chegg's income statement reveals significant challenges. The company has experienced declining revenues, with a TTM revenue decrease of over 10%. Profitability metrics are concerning, with negative net profit and EBIT margins indicating operational inefficiencies. The gross profit margin remains relatively strong at 66.6% for TTM, but overall, the income statement reflects a struggling financial performance.

Balance Sheet

The balance sheet shows a mixed picture. The debt-to-equity ratio has improved to 0.43 in TTM, indicating reduced leverage compared to previous years. However, the return on equity is negative, reflecting poor profitability. The equity ratio is not explicitly calculated, but the reduction in total assets and equity suggests a shrinking balance sheet. Overall, the balance sheet stability is moderate, with some improvements in leverage but ongoing profitability concerns.

Cash Flow

Cash flow analysis shows some resilience. Operating cash flow remains positive, although it has decreased over time. The free cash flow growth rate is negative, reflecting challenges in generating cash from operations. However, the free cash flow to net income ratio is positive, indicating some efficiency in converting earnings to cash. Overall, cash flow management is adequate but under pressure from declining revenues and profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	506.58M	617.57M	716.29M	766.90M	776.26M	644.34M
Gross Profit	328.11M	436.65M	528.60M	569.50M	521.36M	438.92M
EBITDA	-179.31M	-607.43M	183.80M	105.79M	86.77M	127.85M
Net Income	-271.91M	-837.07M	18.18M	266.64M	-1.46M	-6.22M
Balance Sheet
Total Assets	404.45M	868.95M	1.73B	2.47B	2.92B	2.25B
Cash, Cash Equivalents and Short-Term Investments	85.64M	315.72M	330.01M	1.06B	1.55B	1.15B
Total Debt	80.22M	504.46M	617.90M	1.21B	1.70B	1.53B
Total Liabilities	246.60M	675.97M	782.62M	1.35B	1.81B	1.64B
Stockholders Equity	157.86M	192.98M	944.62M	1.12B	1.11B	609.63M
Cash Flow
Free Cash Flow	32.31M	50.25M	163.15M	152.64M	179.04M	155.13M
Operating Cash Flow	77.35M	125.20M	246.20M	255.74M	273.22M	236.44M
Investing Cash Flow	347.62M	11.35M	268.67M	104.89M	-365.77M	-732.79M
Financing Cash Flow	-520.64M	-109.14M	-852.77M	-744.80M	466.72M	588.63M

Chegg Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHGG, the sentiment is Negative. The current price of 1.35 is below the 20-day moving average (MA) of 1.38, below the 50-day MA of 1.44, and above the 200-day MA of 1.19, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 41.36 is Neutral, neither overbought nor oversold. The STOCH value of 67.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CHGG.

Chegg Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LAUR	―	$4.40B	17.60	25.81%	―	0.44%	35.19%
UDMY	―	$1.03B	―	-12.62%	―	3.93%	63.52%
DAO	―	$1.29B	40.49	―	―	-1.66%	―
COUR	―	$1.49B	―	-7.43%	―	8.10%	43.35%
Sector *	―	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
GOTU	―	$759.95M	―	-32.95%	―	56.38%	-16.84%
CHGG	―	$135.41M	-0.48	-103.91%	―	-25.87%	57.21%

Chegg Corporate Events

Chegg Announces Major Workforce Reduction and Restructuring

On October 27, 2025, Chegg announced a significant restructuring plan, which includes reducing its global workforce by approximately 45%, impacting around 388 employees. This move aims to align the company’s cost structure with its newly announced strategic focus on standalone operations. The restructuring is expected to incur charges between $15 million and $19 million, primarily for employee transition and severance, with most costs anticipated by the first quarter of 2026. The company’s board also concluded its review of strategic alternatives and announced updates to its standalone operations strategy.

The most recent analyst rating on (CHGG) stock is a Hold with a $1.50 price target. To see the full list of analyst forecasts on Chegg stock, see the CHGG Stock Forecast page.

Chegg Inc. Earnings Call: Mixed Sentiments and Strategic Focus

Chegg Inc.’s recent earnings call presented a mixed sentiment, highlighting both achievements and challenges. On the positive side, the company exceeded its revenue and EBITDA guidance, showcased strong growth in its Busuu platform, and made significant strides in cost reduction. However, these successes were tempered by concerns over a notable decline in revenue and subscribers, negative free cash flow, and a projected decrease in Q3 revenue guidance.

Chegg’s Strategic Shift: AI and Skills Focus

Chegg, Inc., a leading student-first connected learning platform, offers a range of educational services including Chegg Study, Chegg Writing, and language learning through Busuu, focusing on enhancing student learning experiences and professional skills development.