CHGG

Chegg Inc

TMT


Presented:11/18/2019
Price:$36.89
Cap:$4.46B
Current Price:$1.63
Cap:$0.17B

Presented

Date11/18/2019
Price$36.89
Market Cap$4.46B
Ent Value$3.71B
P/E RatioN/A
Book Value$3.88
Div Yield0%
Shares O/S120.98M
Ave Daily Vol1,841,096
Short Int17.54%

Current

Price$1.63
Market Cap$0.17B
Chegg, Inc. engages in the operations of learning platform for students. It intends to empower students to take control of their education and help the students study, college admissions exams, accomplish their goals, get grades, and test scores. The firm offers required and non-required scholastic materials including textbooks in any format; access to online homework help and textbook solutions; course organization and scheduling; college and university matching tools; and scholarship connections. Its services include Chegg study, writing, tutors, and math solver. The company was founded by Osman Rashid and Aayush Phumbhra on July 29, 2005 and is headquartered in Santa Clara, CA.

Publicly traded companies mentioned herein: Chegg Inc (CHGG), iShares Expanded Tech-Software Sector ETF (IGV), Netflix Inc (NFLX)

Highlights

The presenter is long shares of Chegg Inc (CHGG), noting that the direct-to-student learning platform has the opportunity to efficiently grow its ARPU, service revenue, and potentially its user base. Share prices peaked in the mid-$40 range during Summer 2019 but traded down to ~$29 as recently as early November. The stock has slightly recovered in the first half of November with shares currently trading at ~$35, but the presenter believes the company doesn’t receive enough credit due to poor sell-side coverage. As Chegg’s growth story plays out, he sees 20%+ upside to FY2021 EBITDA and has a twelve-month price target of ~$50 per share based on a ~25x forward EBITDA multiple, the low end of its historical range.

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Idea Discussion

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