Chegg Inc. | $CHGG Stock | Shares Pop Following Strong Q4 Earnings


Chegg Inc. (NASDAQ: CHGG) 


Chegg Inc. (CHGG) shares jumped on the New York Stock Exchange (NYSE) on Tuesday after the online textbook rental company reported its fourth-quarter results the day before.

The company went past the estimates for both earnings and revenue, pushing up the stock by about 15.6% by 12:10 pm. EST. On Monday, the company reported $3.7 million fourth-quarter net income, washing off last year’s loss in the same period.

CHGG Outlook & Earnings


On a per-share basis, the California-based company reported it had 3 cents profit. Costs related to acquisitions and mergers, and earnings adjusted for stock-option expense were 15 cents per share.

Wall Street was not expecting the results, with a survey by Zacks Investment Research on analysts showing an average estimate for earnings of 12 cents per share.

CEO Comments

“We remain positive we will accomplish the financial model targets for 2018 that we laid out three years ago, more so to achieve 25 percent adjusted EBITDA margin, at the same time growing the service revenue of our company by more than 30 percent. In addition, as a result of us transitioning to a digital model where we do every process digitally, we have become more predictable, with most of our revenue coming from subscriptions, thus giving making us more visible. With that, and based our strong performance in Q4, our business is raising its 2018 guidance.” –Madison

Chegg Profile

Based in Santa Clara, California, Chegg is an online textbook rental company that specializes in online tutoring, online textbook rentals, (both in digital and physical formats), internship and scholarships matching, and homework help. It aims at helping college and high school students. In addition, the company owns citation services like BibMe, Citation Machine, Cite This For Me and EasyBib.

The company was established by three students of Iowa State University in the United States. The rising popularity of on-demand, online human help for various courses at college and high school levels favored the company significantly. Its strategy of delivering low-cost and high-quality educational services is has borne amazing results.

Chegg trades on the New York Stock Exchange (NYSE) under the CHGG symbol and has over 900 employees. Aside from its head office in Santa Clara, Chegg also has offices in San Francisco, Provo, Portland, Ukraine, New York, and Israel.

The company’s revenues comprise two streams — Required Materials and Chegg Services. The strategic investment by the company in Chegg Services is expected to propel Q4 revenues. Chegg Services revenues are projected in the band of $57.7 million to $59.5 million, higher than $44.4 million that the company reported a year ago. The $59 million projection implies a 33.3% year-over-year increase as per Zacks Consensus Estimate.

Moreover, the investments of Chegg Study, which is part of Chegg Services, have resulted to record results in engagements, subscribers, and renewals. That has led to a superb 64% year-over-year engagement growth, resulting in 75 million viewed content in the third quarter. – CNN