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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Chegg, Inc. (XNYS:CHGG) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CHGG
Name:
CHEGG, INC. (XNYS:CHGG)
Sector:
46.81M
Industry:
Education & Training Services
CEO:
Mr. Daniel Rosensweig
Total Employees:
1,613
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 274.68% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CHEGG, INC.(CHGG) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND EDUCATION & TRAINING SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
20.64
One Month Price Target:
$20.77
Six Month Price Target :
$21.4
Likely Price in One Year's Time:
Ticker:
$22.17
Likely Trading Range Today Under (Normal Volatility)
$20.5
Price Upper limit ($) :
$20.79
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$18.88
This week:
$16.71
This month :
$12.77
Other Primary facts
Market Cap:
2.57B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
126.40M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
32.27%
-48.82%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$28.81
$25.09
$12.47
$16.19
Medium risk (<10%) entry points
Buy Call
Sell Call
$23.88
Buy Put:
Sell Put:
$23.09
$17.39
$18.19
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CHGG
Sharpe Ratio:
0.01%
Comparison:
CHGG, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -101.57% lower than the industry
& is -99.47% lower than the market/S&P 500 average
Average Returns/Yield of
CHGG
Daily returns:
0.01%
Weekly returns:
0.05%
Monthly returns:
0.19%
Yearly returns:
-3.84%
Comparison of returns:
Average annual returns/yield (last 3 years) is -158.42% below industry average
Classification:
CHGG, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.78
Statistical test of Returns:
CHGG has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.15%
Weekly Volatility:
9.29%
Monthly Volatility:
18.58%
Yearly Volatility:
64.36%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
3.10%
Volatility in last five trading days has been -25.29% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.52%
Weekly VaR:
-19.06%
Monthly VaR:
-38.12%
How Much Can the price of
CHGG
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-34%
Worst case (decline):
>85%
This translates to price declining to:
$13.70
This translates to price declining to:
$3.10
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
CHGG is a 169.01% riskier investment compared to the market/S&P 500 & is 130.46% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 19.15% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CHGG
Beta in relation to market/S&P 500--1.10
Expected beta in 1 year's time:
0.747
Expected beta in 3 year's time:
1.056
Unlevered (debt free) Beta:
0.385
Beta in relation to Nasdaq (XNAS):
0.888
Beta in relation to all global stocks::
0.438
Beta Comparison & Analysis
Beta of competitors/peers::
1.065
Beta is 3.54% higher than peers
Average Industry Beta:
0.833
Beta is 32.24% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
0.02%
Sustainable growth rate is -99.92% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.085
Alpha is -33.40% below industry average alpha yield
Alpha is -538% below the market average
Analysis of Cost of Capital of
CHGG
Equity cost of capital:
0.107
Equity cost of capital is 20.78% above industry mean WACC
Unlevered (without debt) cost of capital:
3.74%
Before-tax cost of debt:
0.39%
After-tax cost of debt:
0.31%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.31%
WACC is -42.25% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$6.17
Revenue growth rate per share of (3Y):
3.23
Annual revenue growth rate is 339.51% above the industry average
EPS:
$0.45
Expected Annual growth rate of EPS (3Y):
-50.00%
Expected future EPS growth rate is 327.95% higher than the Education & Training Services industry
Free cash flow (FCF) per share:
$1.22
-
-
Debt per share
$13.39
EBITDA per share
$1.28
Valuation Analysis Today of
CHGG
P/E Ratio:
66.86
P/E Ratio of Competitors/Peers:
5.67
P/E ratio is 1079.98% higher than main peers & is 531.29% higher than the industry
Stock price/value with industry average P/E ratio: $4.77
CHGG is 333.08% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.34
Price to sales ratio is 34.52% above the industry mean
P/B (Price to book value ratio):
3.23
Price to free cash flow: 16.87
Price to free cash flow ratio is 48.12% higher than the industry
Net income growth rate (3Y):
-92.34%
Net income growth rate is 95.98% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
209.27%
Net debt to equity ratio:
176.16%
Debt to assets ratio:
63.55%
Net debt to assets ratio:
53.49%
Debt-to-asset ratio is 33.48% above industry average
Ability to repay debt:
Interest coverage ratio:
24.67
Interest coverage ratio is -68.39% less than industry average
Looking forward:
Debt growth rate:
10.73%
Annual debt growth is 0% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.287
Statistical significance of correlation:
CHGG has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.406
Stock price is -29.30% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.406
Correlation of price movement with Nasdaq (^IXIC):
-0.085
Covariance of price movement with the market:
-0.206
Kurtosis
37.099
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-2.175
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
CHGG
Gross Profit Margin Ratio:
276%
Operating Profit Margin Ratio:
8.55%
Operating profit margin is -37.59% lower than the industry
Net Profit Margin Ratio:
276%
Effective Tax Rate:
11.01%
Effective tax rate is -69.39% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
8.59%
Return on equity (ROE) is -55.81% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.61%
Return on assets (ROA) is -58.49% lower than the industry
Financial Leverage:
2.7x
Current Ratio:
8.02
Current ratio is 135.90% above industry average
Cash Conversion Cycle (days):
-8.7
Cash conversion cycle is -149.75% below industry average
The remaining useful life of property plant & equipment is: 0.9 years
Stock based compensation to net income ratio:
47.63%
In-depth Efficiency Analysis
Revenue generated per employee:
483.7K
Each employee generates 76% more revenue than industry average revenue per employee
EBITDA generated per employee:
100.4K
Each employee generates 85% more EBITDA than industry average revenue per employee
Profit generated per employee:
43.1K
Each employee generates 108% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
29.0K
Each employee generates 167% more free cash flow than industry average revenue per employee
Assets/Capital per employee
877.8K
Each employee generates 167% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 4.63%
Growth rate in R&D investment/expenditure is -5.96% lower than the industry
Competitors/Peer firms of
CHGG
SPECTRUM BRANDS HOLDINGS, INC. (XNYS:SPB)
Nomad Foods Limited (XNYS:NOMD)
Herbalife Nutrition Ltd. (XNYS:HLF)
COURSERA, INC. (XNYS:COUR)
Natura & Co Holding SA (XNYS:NTCO)
NEW ORIENTAL EDUCATION & TECHNOLOGY GROUP INC. (XNYS:EDU)
GRAHAM HOLDINGS COMPANY (XNYS:GHC)
UNITED BREWERIES COMPANY, INC (XNYS:CCU)
DINGDONG (CAYMAN) LIMITED (XNYS:DDL)
Current Analyst Ratings
Strong buy�8%
Buy�21%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
780.13M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
238.61M
541.53M
185.11M
168.02M
289.72M
121.70M
-
474.82M
4.81M
6.56M
77.33M
161.95M
66.70M
69.46M
78.06M
8.59M
69.46M
Statement of Cash Flow
Date:
Period:
21.81M
Differed Income Tax :
-
Stock Based Compensation :
33.08M
Change in Working Capital :
21.73M
Accounts Receivables:
292.00K
Other Working Capital:
8.55M
Other Non-Cash Items:
- 2327.00K
Net Cash Provided by Operating Activities:
80.04M
Investments in PP&E:
- 33225.00K
Net Acquisitions:
- 401125.00K
Purchases of Investments:
- 273280.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
267.73M
915.43M
1.18B
19.92M
-
43.55M
1.25B
217.27M
641.28M
102.69M
435.41M
-
19.18M
1.42B
-
2.66B
9.55M
-
-
60.46M
85.42M
155.43M
1.69B
6.53M
1.70B
-
1.85B
127.00K
- 331449.00K
- 36922.0K
1.18B
March 31, 2022 at 6:00:00 AM
713.43M
808.52M
2.66B
1.35B
1.69B
1.4B
342.06M
2.50M
- 363072.00K
-
-
- 300450.00K
-
- 7011.00K
- 307461.00K
4.63M
- 585870.00K
270.02M
855.89M
80.04M
- 33225.00K
46.81M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
CHGG
2023
2024
2025
2026
2027
$17.94
$19.26
$20.69
$22.22
$23.87