Perhaps timely catching Chegg Inc. (CHGG) would be a good idea

Chegg Inc. (NYSE: CHGG) stock fell -1.72% on Tuesday to $20.63 against a previous-day closing price of $20.99. With 1.47 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.75 million shares. During the session, the Education & Training Services company that operates in wider Consumer Defensive sector, reached to the highest price of $21.14 whereas the lowest price it dropped to was $20.63. The 52-week range on CHGG shows that it touched its highest point at $37.64 and its lowest point at $15.66 during that stretch. It currently has a 1-year price target of $27.51. Beta for the stock currently stands at 1.09.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of CHGG was down-trending over the past week, with a drop of -15.59%, but this was down by -23.22% over a month. Three-month performance dropped to -4.05% while six-month performance rose 1.18%. The stock lost -21.29% in the past year, while it has lost -18.36% so far this year. A look at the trailing 12-month EPS for CHGG yields 1.97 with Next year EPS estimates of 1.34. For the next quarter, that number is 0.38. This implies an EPS growth rate of 79.20% for this year and -5.29% for next year. EPS is expected to grow by 20.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 53.30%.

Float and Shares Shorts:

At present, 126.13 million CHGG shares are outstanding with a float of 122.77 million shares on hand for trading. On Oct 13, 2022, short shares totaled 6.72 million, which was 5.32% higher than short shares on Sep 14, 2022. In addition to Mr. Daniel Lee Rosensweig as the firm’s Co-Chairman, CEO & Pres, Mr. Andrew J. Brown serves as its Chief Financial Officer.


Institutional Ownership:

Through their ownership of 100.08% of CHGG’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 53.33% of CHGG, in contrast to 41.92% held by mutual funds. Shares owned by individuals account for 32.10%. As the largest shareholder in CHGG with 14.29% of the stake, Baillie Gifford & Co. holds 17,929,525 shares worth 17,929,525. A second-largest stockholder of CHGG, The Vanguard Group, Inc., holds 11,432,187 shares, controlling over 9.11% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in CHGG, holding 7,223,752 shares or 5.76% stake. With a 3.79% stake in CHGG, the American Funds AMCAP Fund is the largest stakeholder. A total of 4,759,205 shares are owned by the mutual fund manager. The Vanguard US Growth Fund, which owns about 3.45% of CHGG stock, is the second-largest Mutual Fund holder. It holds 4,322,721 shares valued at 109.24 million. Vanguard Total Stock Market Index holds 2.89% of the stake in CHGG, owning 3,622,603 shares worth 91.54 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for CHGG since 16 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 11 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With CHGG analysts setting a high price target of $35.00 and a low target of $18.00, the average target price over the next 12 months is $27.74. Based on these targets, CHGG could surge 69.66% to reach the target high and fall by -12.75% to reach the target low. Reaching the average price target will result in a growth of 34.46% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. CHGG will report FY 2022 earnings on 02/05/2024. Analysts have provided yearly estimates in a range of $1.95 being high and $1.21 being low. For CHGG, this leads to a yearly average estimate of $1.33. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Chegg Inc. surprised analysts by $0.07 when it reported $0.21 EPS against a consensus estimate of $0.14. The surprise factor in the prior quarter was $0.04. Based on analyst estimates, the high estimate for the next quarter is $0.41 and the low estimate is $0.12. The average estimate for the next quarter is thus $0.36.

Summary of Insider Activity:

Insiders traded CHGG stock several times over the past three months with 0 Buys and 12 Sells. In these transactions, 0 shares were bought while 74,994 shares were sold. The number of buy transactions has increased to 20 while that of sell transactions has risen to 43 over the past year. The total number of shares bought during that period was 656,693 while 237,997 shares were sold.

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