Chegg shares surge on analyst upgrade

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Chegg($NYSE:CHGG) Inc. shares surged on Monday after Needham Securities analyst Ryan MacDonald upgraded the stock to a “Buy” rating. MacDonald explained in a note that estimates for the company’s November earnings report remain overly conservative. He believes that fall enrollment expectations forecast by Chegg management, which assumed a drop of 500K from the Spring, are overly bearish. MacDonald’s upgrade is based on his belief that the company’s earnings will be better than expected.

Earnings

In the report, CHEGG earned 776.4M USD in total revenue and 44.2M USD in net income. Compared to the previous year, there was a 0.0% increase in total revenue. However, CHEGG’s total revenue has reached from 644.3M USD to 776.4M USD in the last 3 years.

Market Price

At the time of writing, media exposure to Chegg stock is mostly positive. On Monday, Chegg stock opened at $20.00 and closed at $20.70, representing a 9.1% increase from the prior closing price of $19.00. This rise in stock value may be attributed to the positive media exposure, which has helped to increase investor confidence in the company.

VI Analysis

Chegg, Inc. is an American education technology company based in Santa Clara, California. The company offers online textbook rentals, homework help, online tutoring, scholarships and internship matching. Chegg’s fundamental business and financial indicators reflect its long-term potential.

However, according to Value Investor’s Risk Rating, Chegg is a medium risk investment in terms of financial and business aspects. This is due to potential risks in Chegg’s business and financial areas. Chegg’s business model is based on providing students with affordable access to textbooks and other educational materials. However, the company faces competition from other online textbook rental companies, such as Amazon and Barnes & Noble.

In addition, Chegg’s business is reliant on the continued success of the textbook rental market. If textbook rentals decline in popularity, Chegg’s business would be adversely affected. Chegg’s financial indicators are strong, with the company reporting positive cash flow and profitability. However, Chegg has a high debt-to-equity ratio, which could present a financial risk if the company is unable to repay its debt. In addition, Chegg’s stock price is highly volatile, which could present a risk for investors.

Summary

Analyst firm B. Riley FBR upgraded Chegg’s stock from “neutral” to “buy” on the back of strong growth prospects for the company’s online education business. The upgrade sent Chegg’s stock price up sharply in trading on the same day. Positive media coverage of Chegg’s business prospects has helped to drive the stock price higher in recent days. The company’s strong performance in the online education market has led to analyst upgrades and positive investor sentiment.

Chegg’s stock price is up sharply on the back of strong growth prospects for the company’s online education business. Analysts have upgraded the stock on the back of the company’s strong performance in the market, and positive media coverage has helped to drive the stock price higher.