Chegg Inc. (CHGG) Shares: Cheap or Risky?

Chegg Inc. (NYSE:CHGG) saw an upside of 2.49% to $64.16 after adding $1.56 on Wednesday. The 5-day average trading volume is 2,102,342 shares of the company’s common stock. It has gained $68.89 in the past week. An average of 1,616,910 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 1,422,682.

CHGG’s 1-month performance is -18.70% or -$12.18 on its low of $62.18 reached on 10/12/21. The company’s shares have touched a 52-week low of $62.18 and high of $115.21, with the stock’s rally to the 52-week high happening on 02/16/21. YTD, CHGG has lost -30.70% or -$25.51. However, the current price is down -44.31%% from the 52-week high price.


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Insider Transactions

On Apr 26, 170 days have gone by since the last insider trading activity for Chegg Inc. (CHGG). Schultz Nathan J. (PRESIDENT OF LEARNING SERVICES) most recently sold 30,000 shares at $95.26 per share on Apr 26. This transaction cost the insider $2,857,800. PRESIDENT OF LEARNING SERVICES, Schultz Nathan J., sold 30,000 shares at a price of $92.35 on Apr 23. Then, on Apr 13, PRESIDENT, CHEGG SKILLS FILLMORE JOHN PAUL sold 19,714 shares at a price of $90.79 per share. This transaction amounted to $1,789,887.

Valuation Metrics

Chegg Inc. (CHGG) has a trailing price-to-earnings (P/E) ratio of 24.50 for the broader industry and 24.38 for the sector.CHGG stock has a beta of 0.91. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 12.49 while the price-to-book (PB) in the most recent quarter is 6.70, with the price to cash flow ratio at 40.41.

Chegg Inc.’s quick ratio for the period ended June 29 was 18.60, with the current ratio over the same period at 18.60 meaning that CHGG stock is able to fulfill its debt obligations. As well, the company’s long term debt to equity for the quarter ending June 29 was 1.25, while the total debt to equity was 0.00. In terms of profitability, the gross margin trailing 12 months is 66.70%. The trailing 12-month EBITDA margin is 18.98% while for the period ending June 29; Chegg Inc.’s operating margin was 0.10%. The firm’s gross profit as reported stood at $438.92 million against revenue of $644.34 million.

Earnings Surprise

For the quarterly period ending June 29 this year, Chegg Inc.’s cash and short-term investments amounted to $1.22 billion against total debt of $1.69 billion. Net income and sales went up compared to those figures reported in the previous quarter. Analysts expected CHGG to announce $0.37 per share in earnings in its latest quarter, but it posted $0.43, representing a 16.20% surprise. EBITDA for the quarter stood at more than $54.4 million. CHGG stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 1.81 billion, with total debt at $1.69 billion. Shareholders hold equity totaling $144.68 million

Technical Picture

Let’s look briefly at Chegg Inc. (CHGG) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 12 October was 33.69% to suggest the stock is trending Neutral, with historical volatility in this time period at 39.90%.

The stock’s 5-day moving average is $63.96, reflecting a -6.87% or -$4.78 change from its current price. CHGG is currently trading -12.58% above its 20-day SMA, -12.23% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by -26.72% and -29.32% respectively.

Stochastic %K and %D was 8.97% and 5.88% and the average true range (ATR) pointed at 2.40. The RSI (14) points at 32.82%, while the 14-day stochastic is at 22.98% with the period’s ATR at 2.43. The stock’s 9-day MACD Oscillator is pointing at -3.10 and -4.45 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Chegg Inc. (NYSE: CHGG), FBN Securities launched coverage with an Outperform rating. Analysts offering their rating for CHGG stock have a consensus rating for the stock as Overweight. Currently, 1 brokerage advisors rate CHGG as a “sell,”, while 2 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 1 rates the stock as overweight while 13 have offered a “buy” rating.

What is CHGG’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $75.00 and a high of $125.00, with their median price target at $106.00. Looking at these predictions, the average price target given by analysts is for Chegg Inc. (CHGG) stock is $105.81.

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