Reviewing Chegg (NYSE:CHGG) and Its Peers

Chegg (NYSE: CHGG) is one of 42 publicly-traded companies in the “Educational services” industry, but how does it weigh in compared to its peers? We will compare Chegg to related companies based on the strength of its analyst recommendations, dividends, valuation, institutional ownership, risk, profitability and earnings.

Insider & Institutional Ownership

50.9% of shares of all “Educational services” companies are owned by institutional investors. 10.8% of Chegg shares are owned by insiders. Comparatively, 25.5% of shares of all “Educational services” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.



Analyst Recommendations

This is a summary of current recommendations for Chegg and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chegg 0 6 5 0 2.45
Chegg Competitors 141 632 728 16 2.41

Chegg currently has a consensus target price of $21.56, suggesting a potential downside of 18.10%. As a group, “Educational services” companies have a potential upside of 10.40%. Given Chegg’s peers higher possible upside, analysts clearly believe Chegg has less favorable growth aspects than its peers.

Volatility and Risk

Chegg has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500. Comparatively, Chegg’s peers have a beta of 0.00, suggesting that their average stock price is 100% less volatile than the S&P 500.

Profitability

This table compares Chegg and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chegg -6.12% -0.95% -0.81%
Chegg Competitors -12.65% -28.52% -6.84%

Valuation and Earnings

This table compares Chegg and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Chegg $255.07 million -$20.28 million -292.44
Chegg Competitors $535.20 million $32.65 million 14.84

Chegg’s peers have higher revenue and earnings than Chegg. Chegg is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Chegg peers beat Chegg on 8 of the 13 factors compared.

Chegg Company Profile

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. The company offers Chegg Services, which include digital products and services; and required materials that comprise its print textbooks and eTextbooks. Its digital products and services include Chegg Study, which helps students master challenging concepts on their own; Chegg Writing that enables automatically generate sources in the required formats, when students need to cite their sources in written work; Chegg Tutors that allow students find human help on its learning platform through a network of live tutors; Chegg Math, an adaptive math technology and developer of the math application; Brand Partnership, which offers various ways for student-relevant brands to reach and engage high school and college students; Test Prep that provides students with an online adaptive test preparation services; and internships services. The company rents and sells print textbooks and eTextbooks; and offers supplemental materials and textbook buyback services. The company has a strategic alliance with Ingram Content Group. Chegg, Inc. was founded in 2003 and is headquartered in Santa Clara, California.

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