Chegg Inc (NYSE:CHGG) Down 22 Percent on 1Q14 Outlook

Posted by admin February 17, 2014 0 Comment 1179 views


The $532 million market capped learning platform provider for students, Chegg Inc (NYSE:CHGG) stock got hammered downwards at the stock markets on Friday, by close to 22.29 percent. The dip in the investor confidence in the stock occurred on the back of its 4Q operations and full year 2013 result announcement on 13th February. In spite of the firm reporting a 12 percent increase in its 4Q revenue, the investors fled from the stock en-mass during trading on 14th February. The bad news continued to haunt the stock into this week too. Bank of America has summarily downgraded the stock of Chegg (NASDAQ:CHGG) to a neutral rating as against its previous recommendation of buy. They have also downed the price target on the stock to $8.00 per share.

4Q Earnings Call Highlights

Chegg Inc (NYSE:CHGG) earnings per share for the quarter, came in at 40 cents as against the 35 loss anticipated Thomson Reuters. Revenue for the nation’s top e text book provider was up close to 13 percent for the quarter. The big jump in revenue was driven by its digital division, which recorded a 70 percent increase over its 4Q12 revenue to come in at $16.7 million The digital revenue contributed close to 22 percent of the firms overall revenue in 4Q, while it accounted for only 14 percent overall revenue in FY12. For the full year operations, the firm revenue was up by 20 percent to reach a record high of $256 million. On the contrary, its print revenue went up by only 3 percent this quarter as compared to revenue in 4Q12.

FLAT 4Q Guidance

The selloff in the stock occurred on 14th February, due to the flat guidance provided by the firm. It expects its first quarter 2014 revenue to remain constant in the range of $70 to $72 million and expects EBITDA to be in range of loss of $22 to $20 million for 1Q14.



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