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A Look Back at Consumer Subscription Stocks' Q3 Earnings: Chegg (NYSE:CHGG) Vs The Rest Of The Pack

StockStory - Mon Jan 8, 9:15AM CST

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Wrapping up Q3 earnings, we look at the numbers and key takeaways for the consumer subscription stocks, including Chegg (NYSE:CHGG) and its peers.

Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.

The 7 consumer subscription stocks we track reported a slower Q3; on average, revenues beat analyst consensus estimates by 2.5% while next quarter's revenue guidance was 0.8% below consensus. Inflation (despite slowing) has investors prioritizing near-term cash flows, but consumer subscription stocks held their ground better than others, with the share prices up 26.6% on average since the previous earnings results.

Chegg (NYSE:CHGG)

Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.

Chegg reported revenues of $157.9 million, down 4.2% year on year, topping analyst expectations by 3.8%. It was a weak quarter for the company, with a decline in its user base and slow revenue growth.

“Chegg is in a great position to build the most impactful, scalable, AI-enabled, personal learning assistant, which will expand our opportunities to serve more students, in more ways, and at a lower cost per customer,” said Dan Rosensweig, CEO & President of Chegg, Inc.

Chegg Total Revenue

Chegg delivered the slowest revenue growth of the whole group. The company reported 4.4 million users, down 8.3% year on year. The stock is up 23.2% since the results and currently trades at $10.93.

Read our full report on Chegg here, it's free.

Best Q3: Roku (NASDAQ:ROKU)

Spun out from Netflix, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.

Roku reported revenues of $912 million, up 19.8% year on year, outperforming analyst expectations by 6.6%. It was a very good quarter for the company, with a solid beat of analysts' revenue estimates and strong growth in its user base.

Roku Total Revenue

Roku achieved the biggest analyst estimates beat among its peers. The company reported 75.8 million monthly active users, up 15.9% year on year. The stock is up 56.8% since the results and currently trades at $93.58.

Is now the time to buy Roku? Access our full analysis of the earnings results here, it's free.

Weakest Q3: Match Group (NASDAQ:MTCH)

Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ:MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.

Match Group reported revenues of $881.6 million, up 8.9% year on year, slightly ahead of analyst expectations. It was a mixed quarter for Match. Its revenue beat analysts' expectations, driven by better-than-expected ARPU. That growth, however, was offset by year-on-year subscriber churn. This churn can be attributed to management's significant price increases, a new strategy the team implemented at the start of the year. Its subscribers did increase sequentially, however, showing that the initial shock from Match's price increase could be stabilizing. Management has also taken measures to make the company more efficient, enabling it to beat Wall Street's adjusted operating income and EPS estimates.

The stock is up 6.3% since the results and currently trades at $36.77.

Read our full analysis of Match Group's results here.

Netflix (NASDAQ:NFLX)

Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.

Netflix reported revenues of $8.54 billion, up 7.8% year on year, in line with analyst expectations. It was a strong quarter for the company, with revenue roughly in line with expectations. In addition, streaming net adds (essentially its paying customers) beat across all geographies.

The company reported 247.2 million users, up 10.8% year on year. The stock is up 38.2% since the results and currently trades at $478.28.

Read our full, actionable report on Netflix here, it's free.

Coursera (NYSE:COUR)

Founded by two Stanford University computer science professors, Coursera (NYSE:COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.

Coursera reported revenues of $165.5 million, up 21.4% year on year, surpassing analyst expectations by 4.2%. It was a solid quarter for the company, with strong growth in its user base and a decent beat of analysts' revenue estimates.

Coursera achieved the fastest revenue growth and highest full-year guidance raise among its peers. The company reported 136 million users, up 20.4% year on year. The stock is up 11.8% since the results and currently trades at $19.2.

Read our full, actionable report on Coursera here, it's free.

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The author has no position in any of the stocks mentioned

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