Market Overview

RayJay: Chegg's Q4 Print, Guidance Reflect Strong Positioning, Momentum — And So Does The Share Price

Share:
RayJay: Chegg's Q4 Print, Guidance Reflect Strong Positioning, Momentum — And So Does The Share Price

Chegg Inc (NYSE: CHGG) reported solid fourth-quarter results and raised its 2019 guidance Monday

The company enjoys a leading position as an online student platform, and the fundamental outlook for Chegg Services — particularly Chegg Study — remains positive, according to Raymond James.

The Analyst

Raymond James’ Aaron Kessler maintains a Market Perform rating on Chegg.

The Thesis

Chegg reported Q4 total revenue of $95.7 million, significantly ahead of the consensus estimates and guidance.

The strength was driven by Chegg Services, which delivered 35-percent year-on-year revenue growth and 38-percent subscriber growth.

The company also announced an exclusive partnership with online writing lab Purdue OWL. The integration will enhance Chegg Writing’s offering and help expand the product’s customer acquisition funnel, Kessler said in a Tuesday note. 

Chegg guided to Q1 revenue of $93.5-$95.5 million, higher than the consensus expectation of $93.3 million. The company also made an upward revision to its 2019 revenue guidance, from $388 million to $390-$395 million.

Raymond James raised the revenue and EBITDA estimates for 2019 from $388 million to $394 million and from $113 million to $117 million, respectively, to reflect the higher guidance and strength at Chegg Services.

While the prospects for Chegg are bright, the shares already reflect most of this potential, Kessler said. 

Price Action

Chegg shares were rallying 9.66 percent to $38.15 at the time of publication Tuesday. 

Related Links:

26 Stocks Moving In Tuesday's Pre-Market Session

A Peek Into The Markets: US Stock Futures Point To Higher Wall Street Open

Latest Ratings for CHGG

DateFirmActionFromTo
Sep 2019UpgradesHoldBuy
Jun 2019Initiates Coverage OnBuy
Apr 2019MaintainsEqual-WeightEqual-Weight

View More Analyst Ratings for CHGG
View the Latest Analyst Ratings

Posted-In: Aaron Kessler Raymond JamesAnalyst Color Earnings News Guidance Reiteration Analyst Ratings Best of Benzinga

 

Related Articles (CHGG)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
HSKACanaccord GenuityMaintains75.0
AVGOMorgan StanleyMaintains265.0
AMATNeedhamMaintains56.0
VOYACitigroupMaintains62.0
VCCitigroupMaintains86.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Less Gold On The Horizon For Aurizon; Big Fall In Revenues, Profits

J.P. Morgan Executive Director To Lead Trucking Freight Futures For FreightWaves