Online study and academic help platform Chegg (NYSE: CHGG) will be reporting results tomorrow before the bell. Here’s what investors should know.
Chegg met analysts’ revenue expectations last quarter, reporting revenues of $143.5 million, down 23.7% year on year. It was a slower quarter for the company, with a decline in its users and a significant miss of analysts’ number of services subscribers estimates. It reported 3.64 million users, down 20.5% year on year.
Is Chegg a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Chegg’s revenue to decline 34.2% year on year to $114.7 million, a further deceleration from the 7.1% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Chegg has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 1.7% on average.
Looking at Chegg’s peers in the consumer subscription segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Duolingo delivered year-on-year revenue growth of 37.7%, beating analysts’ expectations by 3.4%, and Coursera reported revenues up 6.1%, topping estimates by 2.3%. Duolingo traded up 21.6% following the results while Coursera was also up 14.1%.
Read our full analysis of Duolingo’s results here and Coursera’s results here.
There has been positive sentiment among investors in the consumer subscription segment, with share prices up 15% on average over the last month. Chegg is up 47.9% during the same time and is heading into earnings with an average analyst price target of $1.23 (compared to the current share price of $0.73).
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