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As you might know, Chegg, Inc. (NYSE:CHGG) just kicked off its latest first-quarter results with some very strong numbers. Results overall were solid, with revenues arriving 5.9% better than analyst forecasts at US$121m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.17 per share, were 5.9% smaller than the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
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After the latest results, the consensus from Chegg's five analysts is for revenues of US$413.5m in 2025, which would reflect a substantial 27% 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$0.63. Before this latest report, the consensus had been expecting revenues of US$433.3m and US$0.63 per share in losses.
Check out our latest analysis for Chegg
The average price target fell 25% to US$0.82, with the analysts clearly concerned about the weaker revenue outlook and expectation of ongoing losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Chegg, with the most bullish analyst valuing it at US$1.00 and the most bearish at US$0.65 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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 34% annualised decline to the end of 2025. That is a notable change from historical growth of 2.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Chegg is expected to lag the wider industry.