Chegg Inc (CHGG) Received its Third Buy in a Row

By Jason Carr

After Northland Securities and Jefferies gave Chegg Inc (NYSE: CHGG) a Buy rating last month, the company received another Buy, this time from Barrington. Analyst Alexander Paris reiterated a Buy rating on Chegg Inc today and set a price target of $50. The company’s shares closed last Monday at $34.10.

Paris commented:

“Valuation/: While down from its 52‐week high of $48.22, Chegg’s stock is still up 20% YTD (after rising 74% in 2018) and is trading at 8.7x our 2020 revenue estimate, at a premium to its Ed Tech peers (4.2x) and a group of high‐growth vertical‐ focused SaaS companies (7.4x). We are, nevertheless, reiterating our OUTPERFORM investment rating and our $50 price target, based on its sustainable, above‐average revenue growth and its high and rising profitability.”

According to TipRanks.com, Paris is a 1-star analyst with an average return of -1.4% and a 39.4% success rate. Paris covers the Services sector, focusing on stocks such as Adtalem Global Education Inc, American Public Education, and Strategic Education Inc.

The word on The Street in general, suggests a Strong Buy analyst consensus rating for Chegg Inc with a $49.33 average price target, a 48.9% upside from current levels. In a report issued on September 9, Jefferies also upgraded the stock to Buy with a $44 price target.

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Based on Chegg Inc’s latest earnings release for the quarter ending June 30, the company reported a quarterly GAAP net loss of $2.03 million. In comparison, last year the company had a GAAP net loss of $3.91 million.

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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.