Chegg (CHGG) Stock Forecast & Price Target

Chegg Inc. demonstrated resilience with a gross margin of 71.6%, surpassing expectations due to cost of goods sold efficiencies, despite a year-over-year contraction. The company is on track to realize significant cost savings of $100 million to $120 million by 2025 through restructuring efforts, while also successfully repurchasing $117 million of its convertible notes at a favorable discount. Furthermore, Chegg is actively pursuing product innovation and strategic marketing initiatives aimed at enhancing brand awareness, which positions the company favorably within the competitive digital study tool market as it continues to expand its extensive library of academic resources.

Chegg Inc. has experienced a significant decline in its subscriber base, decreasing from 4.6 million in Q4 2023 to 3.6 million in Q4 2024, affected by intense industry competition and other market pressures. Despite some revenue metrics exceeding expectations, total revenue fell 23.7% year-over-year, primarily driven by a 22.7% drop in Subscription Services revenue and a substantial decline in Skills and Other offerings. Furthermore, the company's adjusted EBITDA fell dramatically short of consensus estimates, indicating considerable operational challenges, as exemplified by a non-GAAP operating margin of 12.7%, well below initial expectations.