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Q4 Earnings Outperformers: Chegg (NYSE:CHGG) And The Rest Of The Consumer Subscription Stocks

StockStory - Thu Apr 4, 3:43AM CDT

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As consumer subscription stocks’ Q4 earnings season wraps, let's dig into this quarter's best and worst performers, 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 8 consumer subscription stocks we track reported a slower Q4; on average, revenues beat analyst consensus estimates by 1.3% while next quarter's revenue guidance was 1% below consensus. Valuation multiples for growth stocks have reverted to their historical means after reaching highs in early 2021, and consumer subscription stocks have not been spared, with share prices down 10.5% on average, since the previous earnings results.

Weakest Q4: 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 $188 million, down 8.4% year on year, topping analyst expectations by 1.1%. It was a weak quarter for the company, with a decline in its user base and slow revenue growth.

“It’s an exciting time at Chegg and I am proud of the team, and how they have navigated through last year, as we completely reinvented the company by leveraging the advancements in artificial intelligence,” said Dan Rosensweig, CEO and President of Chegg, Inc.

Chegg Total Revenue

Chegg delivered the slowest revenue growth of the whole group. The company reported 4.6 million users, down 8% year on year. The stock is down 22.4% since the results and currently trades at $7.2.

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

Best Q4: Duolingo (NASDAQ:DUOL)

Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.

Duolingo reported revenues of $151 million, up 45.4% year on year, outperforming analyst expectations by 1.8%. It was an impressive quarter for the company, with strong growth in its user base and exceptional revenue growth.

Duolingo Total Revenue

Duolingo scored the fastest revenue growth and highest full-year guidance raise among its peers. The company reported 6.6 million users, up 57.1% year on year. The stock is up 12.5% since the results and currently trades at $220.21.

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

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 $866.2 million, up 10.2% year on year, in line with analyst expectations. It was a weak quarter for the company, with a decline in its user base and underwhelming revenue guidance for the next quarter.

The stock is down 4.6% since the results and currently trades at $35.99.

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 $8.83 billion, up 12.5% year on year, surpassing analyst expectations by 1.4%. It was a mixed quarter for the company, with solid growth in its user base but slow revenue growth.

The company reported 260.3 million users, up 12.8% year on year. The stock is up 28.6% since the results and currently trades at $631.95.

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

Udemy (NASDAQ:UDMY)

With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ:UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.

Udemy reported revenues of $189.5 million, up 14.6% year on year, surpassing analyst expectations by 1.9%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations.

Udemy had the weakest full-year guidance update among its peers. The company reported 1.37 million active buyers, up 0.7% year on year. The stock is down 21.4% since the results and currently trades at $11.02.

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

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