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Earnings To Watch: Chegg (CHGG) Reports Q4 Results

StockStory - Sun Feb 4, 1:01AM CST

CHGG Cover Image

Online study and academic help platform Chegg (NYSE:CHGG) will be announcing earnings results today after market close. Here's what to look for.

Last quarter Chegg reported revenues of $157.9 million, down 4.2% year on year, beating analyst revenue expectations by 3.8%. It was a weak quarter for the company, with a decline in its user base and slow revenue growth. The company reported 4.4 million users, down 8.3% year on year.

Is Chegg buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Chegg's revenue to decline 9.4% year on year to $186 million, a further deceleration on the 1.1% year-over-year decrease in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.36 per share.

Chegg Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 2.9%.

Looking at Chegg's peers in the consumer subscription segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. Netflix delivered top-line growth of 12.5% year on year, beating analyst estimates by 1.4% and Match Group reported revenues up 10.2% year on year, exceeding estimates by 0.6%. Netflix traded up 4.4% on the results, Match Group was flat on the results.

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

Investors in the consumer subscription segment have had steady hands going into the earnings, with the stocks up on average 0.3% over the last month. Chegg is down 11.7% during the same time, and is heading into the earnings with analyst price target of $10.4, compared to share price of $9.6.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.

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