Shareholders in Chegg, Inc. (NYSE:CHGG) had a terrible week, as shares crashed 29% to US$1.07 in the week since its latest yearly results. Revenues came in at US$618m, in line with forecasts and the company reported a statutory loss of US$8.10 per share, roughly in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Chegg

After the latest results, the consensus from Chegg's nine analysts is for revenues of US$430.4m in 2025, which would reflect a painful 30% decline in revenue compared to the last year of performance. The loss per share is expected to greatly reduce in the near future, narrowing 92% to US$0.62. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$518.0m and losses of US$0.084 per share in 2025. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

The average price target fell 23% to US$1.34, implicitly signalling that lower earnings per share are a leading indicator for Chegg's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Chegg analyst has a price target of US$2.00 per share, while the most pessimistic values it at US$1.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 30% annualised decline to the end of 2025. That is a notable change from historical growth of 5.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 10.0% annually for the foreseeable future. It's pretty clear that Chegg's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Chegg. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Chegg going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Chegg you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.