4 Keys To The Bull Thesis On Chegg
Online textbook rental innovator and education platform Chegg Inc (NYSE: CHGG) has had a remarkable 2017, with shares up 94 percent year-to-date. Given the vast potential of the online personalized education industry, Chegg's potential ranges beyond just textbooks. A new sell-side initiation report calls for even more growth, citing Chegg as an early mover in the space.
The Analyst
Nithin Pejaver of Citigroup initiated coverage with a Buy rating and $19 price target.
The Thesis
With Chegg expanding at a 26 percent compounded annual growth rate, Nithin Pejaver is positive on the company’s future and highlighted a bull case surrounding four key points:
- A big opportunity: Chegg’s penetration of the addresseable market could be as low as 4 percent.
- Chegg’s business model is a positive feedback loop that aids in new subscriber acquisition and cross-selling.
- High cash conversion (90 percent) that will likely be used for M&A activity.
- A pipeline of new products that are aimed at expanding the addressable marketing and increasing cross-sell opportunities.
Price Action
At last check, shares of Chegg were trading down 1.45 percent at $14.30.
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Latest Ratings for CHGG
Date | Firm | Action | From | To |
---|---|---|---|---|
Mar 2021 | FBN Securities | Initiates Coverage On | Outperform | |
Feb 2021 | Citigroup | Maintains | Buy | |
Feb 2021 | Lake Street | Maintains | Hold |
View More Analyst Ratings for CHGG
View the Latest Analyst Ratings
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