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Chegg, Inc. (CHGG)

  • Wed, Mar. 11, 3:08 PM
    • A day after equity markets tumbled (with many high-beta names especially hard-hit), major tech gainers are outnumbering major decliners, though the Nasdaq is nearly flat.
    • Today's notable tech gainers include RF backhaul hardware vendors DragonWave (DRWI +15.6%) and Aviat (AVNW +8%), LED lighting provider Revolution Lighting (RVLT +5.4%) online textbook rental/learning services provider Chegg (CHGG +3.8%), auto site TrueCar (TRUE +5.3%), loan-shopping site owner Lendingtree (TREE +6.9%), telecom equipment vendor Calix (CALX +2.7%), TV/set-top SoC provider Sigma Designs (SIGM +4.9%), and VoIP hardware/software provider Mitel (MITL +3.8%).
    • Notable decliners include supercomputer maker SGI (SGI -2.9%), 3D printing software vendor Materialise (MTLS -5.5%), security hardware/software provider KEYW Holding (KEYW -2.9%), and Chinese online game developer Changyou (CYOU -2.9%).
    • DragonWave and Aviat are reversing yesterday's big losses. Materialise is making fresh 52-week lows a week after posting mixed Q4 results; KEYW is also seeing new 52-week lows. Revolution's gains continue a volatile post-earnings ride: Shares soared last week after the company posted its Q4 results, but gradually gave back their gains.
    • Previously covered: SanDisk, Intel, EMC, SunEdison, Resonant, Immersion, Logitech, VeriFone, Mobileye, Dangdang, InvenSense
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  • Tue, Feb. 24, 12:45 PM
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  • Tue, Feb. 24, 9:16 AM
  • Mon, Feb. 23, 4:29 PM
    • Along with its Q4 results, Chegg (NYSE:CHGG) has announced an expansion of its partnership with major book distributor Ingram Content. Ingram will buy all of Chegg's textbook inventory and "have responsibility for all new net book investments starting on May 1, 2015," and Chegg will "exit its warehouse operations by the end of this year."
    • Chegg declares the deal will allow it to fully rely on digital revenue streams by the end of 2016, and to achieve "25+% growth, 60+% gross margins and 25+% EBITDA margin by 2017." The company will earn a commission on rented physical textbooks going forward, rather than the full rental price. The original Chegg/Ingram deal (announced last August) gave Ingram control over "sourcing, warehousing, fulfillment, shipping and rental returns" of Chegg's textbook inventory.
    • With the Ingram deal expected to pressure near-term sales, Chegg is guiding for Q1 revenue of $76M-$80M (below an $87.1M consensus), and full-year revenue of $288M-$312M (below a $353.1M consensus). Digital revenue guidance (includes Ingram commissions) is respectively at $29M-$31M and $133M-$143M.
    • Digital revenue rose 71% Y/Y to $28.5M. Thanks to declining print textbook rental sales, all other revenue fell 7% to $55.9M. Gross margin rose 210 bps Y/Y to 54.4%, and operating expenses 25% to $28.8M.
    • Chegg has risen to $7.27 AH.
    • Q4 results, PR
  • Mon, Feb. 23, 4:20 PM
    • Chegg (NYSE:CHGG): Q4 EPS of $0.19 beats by $0.04.
    • Revenue of $84.4M (+9.4% Y/Y) misses by $0.84M.
    • Shares +7.2%.
    • Press Release
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  • Thu, Jan. 15, 2:34 PM
    • As was the case yesterday, many tech stocks are posting outsized losses amid a market selloff. The Nasdaq is currently down 1.1%.
    • Twitter (TWTR -5.7%) is among the guilty parties. The microblogging platform has given back a large chunk of the gains it saw last week following Carl Icahn rumors (since denied by Icahn) and Yahoo deal speculation. Its Q4 report arrives on Feb. 5.
    • Many other Internet companies are also off sharply. The list includes jobs site Monster (MWW -6.4%), local services marketplace Angie's List (ANGI -5.9%), online textbook rental leader Chegg (CHGG -5.7%), grocery coupon site (COUP -7.1%), flash deals provider Zulily (ZU -4.7%), and Chinese online real estate plays SouFun (SFUN -8.1%), E-House (EJ -6.3%), and Leju (LEJU -5.6%). Previously covered: Zillow and Trulia.
    • Other tech names posting major declines: M2M hardware provider Sierra Wireless (SWIR -6.2%), ultracapacitor maker Maxwell (MXWL -5.2%), RFID tech provider SuperCom (SPCB -7.1%), VoIP service provider magicJack (CALL -6.1%), NFC reader maker On Track (OTIV -7.1%), haptic tech developer Immersion (IMMR -5.3%), and security tech plays Barracuda (CUDA -6.4%), Vasco (VDSI -7.3%), and Imperva (IMPV -7.8%).
  • Nov. 3, 2014, 5:38 PM
    • Top gainers, as of 5:15 p.m.: BLMN +19.4%. AUQ +9.0%. ABEV +8.5%. ELNK +8.3%. AMX +7.0%.
    • Top losers, as of 5:15 p.m.: BRDR -22.1%. SALE -18.2%. HLF -12.4%. CHGG -8.7%. S -6.8%.
  • Nov. 3, 2014, 4:40 PM
    • Though Chegg (NYSE:CHGG) beat Q3 estimates, it's guiding for Q4 revenue of $82M-$87M, below a $94.7M consensus. Adjusted EBITDA is expected to fall to $12M-$15M from $18.6M a year earlier. No explanation is given for the soft outlook.
    • Q3 print (textbook rental) revenue +14% Y/Y to $55.3M. Digital revenue (lifted by both acquisitions and organic growth) +102% to $26.2M. Digital revenue is expected to grow to $27M-$30M in Q4.
    • Gross margin rose to 16.4% from 5.3% a year ago - the Ingram deal likely helped. Opex rose to 38.9% of revenue from 37.9% a year ago.
    • Q3 results, PR
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  • Oct. 24, 2014, 2:17 PM
    • Chegg (NYSE:CHGG) is turning in a strong day after Amazon partly blamed a shift in demand from textbook sales to rentals for slowing North American media revenue growth.
    • Chegg obtained $45.8M in Q2 revenue from its print textbook rental ops, and $18.7M from faster-growing digital revenue streams. Q3 results are due on Nov. 3.
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  • Sep. 22, 2014, 1:45 PM
    • High-beta tech stocks are selling off hard as the Nasdaq registers a 1.3% decline. The selling is broad-based, with Internet, solar, and enterprise tech stocks all well-represented among the ranks of major decliners.
    • Major Internet decliners: BIDU -4.7%. ANGI -7%. YELP -5.9%. AWAY -5.1%. CHGG -5.9%. GRUB -5.8%. P -5.2%. Z -4.6%. TRLA -4.8%. ATHM -7.9%. BITA -7%. DANG -5.9%. WB -5.3%.
    • Solar: FSLR -4.5%. SCTY -7.5%. SPWR -4.5%. DQ -7.6%. JKS -5.5%. ASTI -6.3%. ENPH -5.5%. CSIQ -4.8%.
    • Enterprise: WDAY -5.4%. GIMO -6.7%. VMEM -7.7%. IMPV -4.8%. MKTO -4.9%. SPRT -5.1%. CSOD -5.5%.
    • Others: HIMX -4.6%. SIGM -5.6%. WATT -9.7%. CYNI -5.3%. ADNC -5.7%. PXLW -5%. SWIR -5.8%. MITK -6%. OCLR -6%.
  • Aug. 5, 2014, 12:47 PM
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  • Aug. 4, 2014, 5:35 PM
    • Top gainers, as of 5:15 p.m.: GTAT +12.0%. USM +11.8%. CHGG +9.1%. RT +6.5%. QUIK +5.9%.
    • Top losers, as of 5:15 p.m.: FIVN -27.4%. SALE -19.0%. LF -8.9%. OESX -6.0%. IMPV -6.0%.
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  • Aug. 4, 2014, 4:26 PM
    • Along with its Q2 report, Chegg (NYSE:CHGG) has announced a partnership with top book distributor Ingram Content under which Ingram will be "responsible for the sourcing, warehousing, fulfillment, shipping and rental returns" of Chegg's print textbook inventory.
    • Chegg will continue to "own the customer experience, including catalog, end-user pricing, marketing, customer support, ongoing student relationships and data." It will receive a commission on textbook sales/rentals fulfilled by Ingram.
    • Chegg, which has been trying to lower its exposure to its print textbook rental ops relative to digital services, expects the deal to yield "a substantial reduction in net cash expenditures on textbooks" for 2H14.
    • The company is guiding for Q3 revenue of $75M-$80M ($24M-$28M digital), in-line with a $78.3M consensus. Full-year revenue guidance of $305M-$315M ($94M-$98M digital) is below a $315.6M consensus; the Ingram deal is expected to lower revenue by $8M-$12M, while acquisitions are expected to boost revenue by $8M-$10M.
    • Full-year free cash flow is expected to be in a range of $5M-$10M, and gross margin around 29%.
    • Print revenue +5% Y/Y in Q2 to $45.8M. Digital revenue +54% to $18.7M. Gross margin -680 bps Y/Y to 40.4% thanks to a mix shift towards digital.
    • Shares +2% AH. They fell 8% in regular trading.
    • Q2 results, PR
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  • Jun. 26, 2014, 1:15 PM
    • In an article now out of embargo, SA Pro author Howie Man predicts major textbook rental price cuts from Amazon and Staples will continue pressuring Chegg's (CHGG -14.1%) margins, and that (given $100M+ in annual textbook spend) the company's balance sheet will be hard-pressed to cope.
    • Whereas Chegg gets 80% of its revenue from textbook rentals, Amazon and Staples are willing to use it as a loss leader to bolster sales of other products/services, the author argues. "Competing against players with significantly greater scale and distribution infrastructure that are also willing to lose money is a recipe for disaster."
    • He assigns a liquidation value of $3.50-$4/share, while adding this figure could drop due to ongoing cash burn. Free cash flow was -$60M over the last 3 quarters of 2013.
    • Chegg, working hard to diversify beyond textbook rentals, saw its gross margin fall 700 bps Y/Y in Q1 to 12.2%. The company expects a GM of 27%-29% for the whole of 2014. Its Q1 digital GM was 55%.
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  • Jun. 26, 2014, 12:45 PM
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  • Jun. 3, 2014, 11:43 AM
    • Chegg (CHGG +3%) is buying InstaEDU, a site that connects students with online tutors handling 2.5K+ subjects, for $30M in cash.
    • InstaEDU screens tutors using a qualification system, and takes a cut of tutoring fees. Rates start at $0.40/minute.
    • The startup's services complement Chegg Study, which provides guided solutions for coursework in partnership with textbook publishers and qualified experts.
    • They also strengthen Chegg's efforts to grow its digital sales (+66% Y/Y in Q1, 24% of revenue), and thus cut its dependence on a slower-growing print textbook rental business (+13% in Q1, 76% of revenue).
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Company Description
Chegg Inc is a student-first connected learning platform empowering students to take control of their education to save time and money. Its integrated platform Student Hub helps students choose a college through graduation and beyond.