In the latest trading session, Chegg (CHGG) closed at $70.79, marking a +1.62% move from the previous day. This change outpaced the S&P 500's 1.61% gain on the day. Meanwhile, the Dow gained 1.51%, and the Nasdaq, a tech-heavy index, added 1.87%.
Prior to today's trading, shares of the provider of online textbook rental services had lost 7.37% over the past month. This has lagged the Computer and Technology sector's loss of 4.69% and the S&P 500's loss of 4.08% in that time.
CHGG will be looking to display strength as it nears its next earnings release. In that report, analysts expect CHGG to post earnings of $0.12 per share. This would mark a year-over-year decline of 33.33%. Meanwhile, our latest consensus estimate is calling for revenue of $143.89 million, up 52.83% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.27 per share and revenue of $612.93 million. These totals would mark changes of +39.56% and +49.16%, respectively, from last year.
Any recent changes to analyst estimates for CHGG should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.85% higher within the past month. CHGG is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, CHGG is currently trading at a Forward P/E ratio of 54.9. This represents a discount compared to its industry's average Forward P/E of 77.15.
We can also see that CHGG currently has a PEG ratio of 1.83. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 5.86 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 174, putting it in the bottom 32% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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