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Chegg Inc. (CHGG) Stock: If Profits Look Great, Now Be Careful

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FBN Securities raised the price target for the Chegg Inc. (NYSE:CHGG) stock to “an Outperform”. The rating was released on March 30, 2021. We previously noted in another research note published on February 09, 2021 by Lake Street that reiterated the stock to a Hold with a price target of $98 for CHGG stock. The research report from Barrington Research has reiterated the stock to Outperform, with a price target set at $120. The stock was reiterated by KeyBanc Capital Markets, who disclosed in a research note on January 26, 2021, to Overweight and set the price objective to $120. In their research brief published January 15, 2021, Needham analysts reiterated the Chegg Inc. stock to Buy with a price target of $115.


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Historical Earnings Surprises and Revenue Forecasts

Profit is the most critical financial performance measure. Every investor in a business is looking forward to the earnings report as stock price to increase when earnings exceed market expectations and progressively decrease when earnings do not meet expectations. The firm reported an earnings per share (EPS) of $0.28 during the last quarter as opposed to a consensus estimate of $0.3, which indicates the company missed its estimate by -$0.02, which implies that the company surprised the market by -6.70%. It appears that the average earnings per share estimate for the current quarter (ending in Jun 2021) is $0.37. This is an average of 15 analysts’ earnings, where the high earnings per share estimate is $0.46 and the low earnings per share estimate is $0.33. According to 14 analyst estimates, an average revenue estimate of $189.94M is projected for the current quarter with a high revenue estimate of $195M and a low estimate of $188M.

The latest trade, Performances and Moving Averages give us the following Picture

The share price of Chegg Inc. (NYSE:CHGG) dipped -2.97% to close Friday’s market session at $73.85, lower as compared to yesterday’s close. The stock price fluctuated between $73.64 and $75.74 throughout the trading session with the volume trading being 2195253 shares, which represented a significant variation when compared to the three months average volume of 1.81 million shares. The firm’s stock price fluctuated -4.52% within the last five trades and -20.75% within the last 30 trades, which was a significant change from the beginning of this year. Despite the fact that the share price increased 6.97% in the last 6 months and -28.84% was subtracted to its value over the previous 3 months. CHGG stock is trading at a margin of -12.28%, -15.48% and -12.41% apart from the 20-Day, 50-Day and 200-Day Simple Moving Average prices.

As of the close of trading, CHGG deals in the Consumer Defensive domain. The stock is trading -35.90 percent below its 52-week high and 34.64 percent above its 52-week low. For example, looking both at the price and the high and low measurements of 52 weeks will give you a clearer picture of the direction the price is heading. The firm’s Weighted Alpha is 5.77. A positive weighted alpha indicates the firm has done well over the course of the year, whereas one below 0 indicates that the firm has done poorly.

What Does Chegg Inc.’s Profitability and Valuation Ratios Tell Us About the Stock?

With regard to the profitability of the company, the operating margin is currently at -1.70 percent and the profit margin is -9.20 percent, and the company has reported a gross margin of 67.00 percent. The profit margin, also known as the revenue ratio or gross profit ratio, is an efficiency figure used to estimate the business’s profitability by comparing net income and sales. The higher the number, the more profits are generated for the company and vice versa.

The stock’s market cap achieved a total value of $10.80 billion as of the last trading session. Market capitalization is the total value of all outstanding shares of a corporation and it is used to measure a company’s market value. The price-to-earnings ratio is a method of assessing corporate values by comparing them to their per-share profit. Forward P/E stands at 43.19. Forward price-to-earnings is calculated using predicted earnings for the next financial year’s P/E determination. The stock has achieved an effective Price-to-Sales Ratio of 15.19 that mirrors the cost to be found for sales by the market. The firm managed a Price-to-Book ratio of 7.98, which equates the market value of a stock with its book value.

Is Insider Trading a Real Thing?

Almost all investors and traders prefer to invest in shares controlled by the management of a corporation as a management company will be more likely to run the business itself and to never conduct things against the management’s desires and will always try to do what is best for their shareholders. Currently, 1.70 percent of Chegg Inc. shares are owned by insiders, and 95.12 percent are held by financial institutions. Schultz Nathan J., the PRESIDENT OF LEARNING SERVICES at Chegg Inc. (CHGG) has sold 30,000 shares of firm on Apr 26 at a price of $95.26 against the total amount of $2.86 million. In another inside trade, Schultz Nathan J., PRESIDENT OF LEARNING SERVICES of Chegg Inc. (NYSE:CHGG) sold 30,000 shares of the firm on Apr 23 for a total worth of $2.77 million at a price of $92.35. An inside trade which took place on Apr 13, PRESIDENT, CHEGG SKILLS of Chegg Inc. FILLMORE JOHN PAUL sold 19,714 shares of firm against total price of $1.79 million at the cost of $90.79 per share.

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