Online study and academic help platform Chegg (NYSE:CHGG) will be reporting results tomorrow after market close. Here’s what to look for.
Chegg beat analysts’ revenue expectations by 1.9% last quarter, reporting revenues of $136.6 million, down 13.5% year on year. It was a slower quarter for the company, with a decline in its users and a significant miss of analysts’ number of services subscribers estimates. It reported 3.83 million users, down 12.9% year on year.
Is Chegg a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Chegg’s revenue to decline 23.5% year on year to $143.8 million, a further deceleration from the 8.4% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.18 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Chegg has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 1.9% on average.
Looking at Chegg’s peers in the consumer subscription segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Roku delivered year-on-year revenue growth of 22%, beating analysts’ expectations by 4.4%, and Udemy reported revenues up 5.5%, topping estimates by 2.7%. Roku traded up 13.9% following the results while Udemy was also up 27.9%.
Read our full analysis of Roku’s results here and Udemy’s results here.
Investors in the consumer subscription segment have had fairly steady hands going into earnings, with share prices down 1.3% on average over the last month. Chegg is down 4.9% during the same time and is heading into earnings with an average analyst price target of $1.73 (compared to the current share price of $1.45).
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