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Chegg's Earnings Outlook

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Chegg (NYSE: CHGG) announces its next round of earnings this Monday, October 26. Here is Benzinga's everything-that-matters guide for this Monday's Q3 earnings announcement.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Analysts predict Chegg will report earnings of $0.1 per share on revenue of $143.68 million. In the same quarter last year, Chegg reported EPS of $0.18 on revenue of $94.15 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The Wall Street estimate would represent a 44.44% decline in the company's earnings. Revenue would be up 52.61% from the year-ago period. Here is how the Chegg's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate 0.32 0.15 0.29 0.08
EPS Actual 0.37 0.22 0.35 0.18
Revenue Estimate 136.61 M 122.73 M 122.97 M 89.22 M
Revenue Actual 153.01 M 131.59 M 125.50 M 94.15 M

Stock Performance

For a full 12 months, the return has risen by 165.93%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

Do not be surprised to see the stock move on comments made during its conference call. Chegg is scheduled to hold the call at 16:30:00 ET and can be accessed here.

 

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Posted-In: Earnings