Fundamental analysis: Chegg, Inc. (CHGG)

Awarener score: 7.5

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Very good), the business stability (Lacking) and growth (Very good), and the company's inclination to return cash to the stockholders (Excellent).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.0

Business has been growing at a very good pace. It's been more than average in relation to peer companies.
Chegg, Inc. business shows some variation, there's some risk. It looks bottom tier against rivals.

Margins score: 6.2

CHGG profit margins -on goods and services sold- are usually excellent. They stand better than most rival companies.
Business profit on sales tends to be hardly sufficient. It's below average when measured against competitors.
Profits on sales made -available to repay debt and purchase properties- are usually sufficient. They remain rather normal in relation to peers.
Earnings -before income taxes and interests on loans taken- tend to be hardly sufficient in relation to total revenues. They're still somewhat worse than similar companies.
Profits -before income taxes- are usually hardly sufficient considering total sales, and remain almost average when measured against rivals.
Total net profit tends to be good when confronted to sales. Company stands encouraging in relation to comparable firms.

Growth score: 3.0

Chegg, Inc. profit -on goods and services sold- has been growing at a good pace. It's been a slight improvement compared to competitors.
In recent years, the firm hasn't always been able to profit from operations, which has been bottom tier against comparable firms.
Profits -available to repay debt and purchase properties- have been growing at an excellent pace, which compares encouraging in relation to peer enterprises.
In the previous years, the firm couldn't always make a profit -before income taxes and interests on loans taken-. It turns to be a disappointment compared to similar stocks.
In past years, at least once the company lost money -before income taxes-. It was bottom tier against rivals.
In the previous years, the firm had at least a total net loss, and last-in-rank when measured against peer companies.
The company lost money at least once in the past years. It's been a disappointment compared to industry peers.

Miscellaneous score: 7.0

CHGG managed to get a credit on income taxes in the past years, even though it earned money. It's been top-notch against peers.
Research and development expenses consume some portion of revenues. It's substantially worse when measured against competitors.
The company grows modestly in relation to research and development efforts. It stands a disappointment compared to rival companies.

Profitability score: 5.2

Chegg, Inc. usually gets hardly sufficient returns on the resources it controls. It proves below average when measured against peer firms.
The company normally gets hardly sufficient proceeds -on the resources directly invested in the business-. They remain lacking compared to similar companies.
There's usually some profitability -in relation to owned resources-. It ranks similar to competitors.
In the past, got barely sufficient returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's below average when measured against comparable enterprises.

Usage of Funds score: 4.7

CHGG usually uses a large portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is large. It stands below average when measured against rival firms.
The company is usually investing in new property, plant, and equipment, to improve its operating capabilities, which is great when measured against industry peers.
In the past twelve months the stock paid no dividends. It came bottom tier against competitors.
The company pays no dividend, so measuring its growth is meaningless. The company has behaved in an conservative way compared to similar firms.
As no dividends are paid, it is useless trying to estimate their sustainability in time. Sustainability looks not applicable in regard to comparable companies.
The company usually enlarges quite a bit the pool of investors, resulting in more mouths feeding on the pie of profits. It remains lacking compared to peer enterprises.
Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands rather normal in relation to rivals.
The company uses a large portion of genuine fund generation to reward investors, which can probably be sustained for as long as business doesn't turn sour. It still looks similar to competitors.

Balance Sheet score: 6.4

Chegg, Inc. intangible assets (like brands and goodwill) represent a portion of resources controlled, according to accounting books. There could be difficulties in liquidating them if the company ever gets in financial distress. It happens to be weak when measured against peer companies.
The company has a lot more short-term resources than short-term obligations. Liquidity concerns are most likely irrelevant. It turns to be impressive in relation to similar firms.
A substantial part of resources controlled were provided for with financial debt. Creditors have as many claims on the company as shareholders. The situation is somewhat risky. It remains mediocre against rival firms.
Controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks weak when measured against rivals.
For every dollar of short-term obligations, the company has abundant dollars in cash and short-term receivables. It's impressive in relation to peer firms.
For every dollar of short-term obligations, the company has more than enough dollars in cash and equivalents, which is top-notch against similar enterprises.
Usually, sales are on less than a month credit. It still ranks encouraging in relation to peers.
Normally has no inventories. It comes up as impressive in relation to competitors.
On average, it takes close to one month from the purchase to charging customers. It happens to be somewhat better than peers.
On average pays suppliers before a month since the purchase. It ranks similar to industry peers.
The company charges its customers before it must pay its suppliers, so the more it sales, the more free funds it gets. It's rather normal in relation to similar companies.
Company earns net interest income on its investments and therefore is in a quite comfortable financial position. It stands top-notch against rival firms.
Business earnings have usually been extremely low when measured against loans taken. Even severely cutting back reinvesting in the business, it could take more than twenty years to repay the obligations. Additional stockholders' funding may be a quicker way, but at the cost of increasing the mouths to feed on the eventual pie of profits. It ranks weak when measured against comparable enterprises.
Revenues are modest in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks lacking compared to similar firms.
Resource exploitation is slightly low when yearly sales are considered, business volume should be increased. This metric is normally tied to the industry where the firm belongs. It's still bottom tier against peer companies.

Valuation score: 7.2

Chegg, Inc. looks very cheap in relation to profits and financial position. It happens to be great when measured against competitors.
Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a weak position compared to peers.
In the past twelve months, the company generated excellent free funds in relation to the stock price, which stands well ranked against similar companies.
The company usually generates much more genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share might be very interesting. It's still encouraging in relation to industry firms.
In the past twelve months, the company has rewarded investors, considering both dividends and share on the pie of earnings. It came up excellent in relation to peer ventures.
The company is indebted, it should focus on loan repayment. It looks somewhat worse than similar enterprises.
Considering the past twelve months, traditional Price-to-Earnings relation looks very cheap. Possible reasons are that the market might be betting current earnings will be hard to sustain through time, or that the company has very high fund needs, or a weak financial position, among others. If that isn't the case, the current stock price might be very attractive. It ranks encouraging in relation to peer companies.
Comparing the current stock price with the past twelve-months revenues gives a roughly two to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a weak position compared to rival firms.
The relation between the stock price and accounting book value might be reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains slightly worse than peer firms.
In the past twelve months, the operating business earned good money when compared to the current stock price and financial position. It happens to be more than average in relation to industry peers.
In an alternate metric of bang for the buck, the company has usually shown a modest earnings power ability when measured against the current stock price and financial position. It's still close to average when compared to peer companies.

Total score: 5.7

Company at a glance: Chegg, Inc. (CHGG)

Sector, industry: Consumer Defensive, Education & Training Services

Market Cap: 1.15 billions

Revenues TTM: 0.75 billions

Chegg, Inc. operates direct-to-student learning platform that supports students starting with their academic journey and extending into their careers with products and services to support and help them better understand their academic course materials. The company offers Chegg Services, which include subscription services; and required materials that comprise its print textbooks and eTextbooks. Its subscription services include Chegg Study, which helps students master challenging concepts on their own; Chegg Writing that provides students with a suite of tools, such as plagiarism detection scans, grammar and writing fluency checking, expert personalized writing feedback, and premium citation generation; Chegg Math, a step-by-step math problem solver and calculator that helps students to solve problems; Chegg Study Pack, a bundle of various Chegg Services product offerings, including Chegg Study, Chegg Writing, and Chegg Math Solver services, which creates an integrated platform of connected academic support services; Busuu, an online language learning solution that offers a comprehensive solution through a combination of self-paced lessons, live classes with expert tutors, and the ability to learn and practice with members of the Busuu language learning community; and Thinkful, a skills-based learning platform that offers professional courses along with networking, interviewing, and career services. The company also provides other services, such as Chegg Life, Chegg Prep, and Chegg Internships; provides personal and professional development skills training; and rents and sells print textbooks and eTextbooks. Chegg, Inc. was incorporated in 2005 and is headquartered in Santa Clara, California.