NYSE:CHGG

Stock Analysis Report

Executive Summary

Chegg, Inc. operates direct-to-student learning platform that supports students on their journey from high school to college and into their career with tools designed to help them pass their test, pass their class, and save money on required materials.

Snowflake

Fundamentals

Exceptional growth potential with mediocre balance sheet.


Similar Companies

Share Price & News

How has Chegg's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CHGG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

6.5%

CHGG

-0.06%

US Consumer Services

0.4%

US Market


1 Year Return

36.1%

CHGG

19.2%

US Consumer Services

13.1%

US Market

Return vs Industry: CHGG exceeded the US Consumer Services industry which returned 19.2% over the past year.

Return vs Market: CHGG exceeded the US Market which returned 13.1% over the past year.


Shareholder returns

CHGGIndustryMarket
7 Day6.5%-0.06%0.4%
30 Day9.1%0.1%4.0%
90 Day-10.9%-0.8%7.4%
1 Year36.1%36.1%19.8%19.2%15.6%13.1%
3 Year350.1%350.1%100.3%89.4%48.2%38.6%
5 Year449.5%449.5%131.4%106.0%62.6%44.6%

Price Volatility Vs. Market

How volatile is Chegg's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Chegg undervalued compared to its fair value and its price relative to the market?

9.28x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: CHGG ($36.05) is trading above our estimate of fair value ($27.26)

Significantly Below Fair Value: CHGG is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CHGG is unprofitable, so we can't compare its PE Ratio to the Consumer Services industry average.

PE vs Market: CHGG is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate CHGG's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: CHGG is overvalued based on its PB Ratio (9.3x) compared to the US Consumer Services industry average (2x).


Next Steps

Future Growth

How is Chegg forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

77.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CHGG is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2.7%).

Earnings vs Market: CHGG is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: CHGG's is expected to become profitable in the next 3 years.

Revenue vs Market: CHGG's revenue (21.8% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: CHGG's revenue (21.8% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CHGG's Return on Equity is forecast to be high in 3 years time (30.8%)


Next Steps

Past Performance

How has Chegg performed over the past 5 years?

44.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CHGG has a high level of non-cash earnings.

Growing Profit Margin: CHGG's current net profit margins (-3.3%) are higher than last year (-5.5%).


Past Earnings Growth Analysis

Earnings Trend: CHGG is unprofitable, but has reduced losses over the past 5 years at a rate of 44.3% per year.

Accelerating Growth: Unable to compare CHGG's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: CHGG is unprofitable, making it difficult to compare its past year earnings growth to the Consumer Services industry (7.1%).


Return on Equity

High ROE: CHGG has a negative Return on Equity (-2.66%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Chegg's financial position?


Financial Position Analysis

Short Term Liabilities: CHGG's short term assets ($844.1M) exceeds its short term liabilities ($88.8M)

Long Term Liabilities: CHGG's short term assets (844.1M) do not cover its long term liabilities (906.3M)


Debt to Equity History and Analysis

Debt Level: CHGG's debt to equity ratio (189.4%) is considered high

Reducing Debt: Insufficient data to determine if CHGG's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: CHGG has a low level of unsold assets or inventory.

Debt Coverage by Assets: CHGG's debt is not covered by short term assets (assets are 1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable CHGG has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: CHGG is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 71.7% per year.


Next Steps

Dividend

What is Chegg's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.1%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate CHGG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate CHGG's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CHGG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CHGG's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CHGG's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Chegg's salary, the management and board of directors tenure and is there insider trading?

5.5yrs

Average management tenure


CEO

Dan Rosensweig (57yo)

9.8yrs

Tenure

US$9,117,507

Compensation

Mr. Daniel Lee Rosensweig, also known as Dan, has been the Chief Executive Officer and President of Chegg, Inc. since February 2010. Mr. Rosensweig serves as a Senior Advisor of TPG Capital, L.P. He serves ...


CEO Compensation Analysis

Compensation vs Market: Dan's total compensation ($USD9.12M) is above average for companies of similar size in the US market ($USD5.10M).

Compensation vs Earnings: Dan's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

5.5yrs

Average Tenure

55yo

Average Age

Experienced Management: CHGG's management team is seasoned and experienced (5.5 years average tenure).


Board Age and Tenure

2.7yrs

Average Tenure

55yo

Average Age

Experienced Board: CHGG's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$1,002,19017 Dec 18
Theodore Schlein
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares34,750
Max PriceUS$28.84

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.3%.


Management Team

  • Dan Rosensweig (57yo)

    Co-Chairman

    • Tenure: 9.8yrs
    • Compensation: US$9.12m
  • Andy Brown (59yo)

    Chief Financial Officer

    • Tenure: 8.1yrs
    • Compensation: US$3.84m
  • Mike Osier (56yo)

    Chief Information Officer & Chief Outcomes Officer

    • Tenure: 0.8yrs
    • Compensation: US$3.12m
  • Chuck Geiger (52yo)

    Chief Product Officer

    • Tenure: 4.3yrs
    • Compensation: US$2.68m
  • Esther Lem (63yo)

    Chief Marketing Officer

    • Tenure: 8.9yrs
    • Compensation: US$2.53m
  • Nathan Schultz (42yo)

    President of Learning Services

    • Tenure: 7.5yrs
    • Compensation: US$3.12m
  • Dave Borders (45yo)

    General Counsel & Secretary

    • Tenure: 3.6yrs
  • Robin Tomasello (48yo)

    Principal Accounting Officer

    • Tenure: 5.5yrs
  • Tracey Ford

    Vice President of Investor Relations

    • Tenure: 0yrs
  • Jenny Brandemuehl (55yo)

    Chief People Officer

    • Tenure: 3.3yrs
    • Compensation: US$2.53m

Board Members

  • Ted Schlein (55yo)

    Independent Director

    • Tenure: 10.9yrs
    • Compensation: US$239.99k
  • Dan Rosensweig (57yo)

    Co-Chairman

    • Tenure: 9.8yrs
    • Compensation: US$9.12m
  • Richard Sarnoff (60yo)

    Co-Chairperson

    • Tenure: 1.3yrs
    • Compensation: US$312.57k
  • Reneé Budig (58yo)

    Independent Director

    • Tenure: 4yrs
    • Compensation: US$234.99k
  • Jed York (38yo)

    Independent Director

    • Tenure: 6.4yrs
    • Compensation: US$229.99k
  • Marne Levine (48yo)

    Independent Director

    • Tenure: 6.5yrs
    • Compensation: US$234.99k
  • Paul LeBlanc

    Director

    • Tenure: 0.3yrs
  • Melanie Whelan (42yo)

    Director

    • Tenure: 0.4yrs

Company Information

Chegg, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Chegg, Inc.
  • Ticker: CHGG
  • Exchange: NYSE
  • Founded: 2003
  • Industry: Education Services
  • Sector: Consumer Services
  • Market Cap: US$4.361b
  • Shares outstanding: 120.98m
  • Website: https://www.chegg.com

Number of Employees


Location

  • Chegg, Inc.
  • 3990 Freedom Circle
  • Santa Clara
  • California
  • 95054
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CHGGNYSE (New York Stock Exchange)YesCommon StockUSUSDNov 2013
0CGDB (Deutsche Boerse AG)YesCommon StockDEEURNov 2013

Biography

Chegg, Inc. operates direct-to-student learning platform that supports students on their journey from high school to college and into their career with tools designed to help them pass their test, pass the ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/14 00:39
End of Day Share Price2019/11/13 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.