Chegg Offers Educated Gains

08/28/2018 5:00 am EST


Leo Fasciocco

Investment Columnist and Publisher, Ticker Tape Digest

Chegg (CHGG), based in Santa Clara, Ca., provides students with books and materials to help their education, notes Leo Fasciocco, breakout specialist and editor of Ticker Tape Digest.

With annual revenues of $254 million, the company provides services that help students study for college admission exams, find colleges, get better grades and test scores while in school.

The firm also helps students find internships that allow them to gain skills to help them enter the workforce after college. The company matches domestic and international students with colleges, universities and other academic institutions.  It also sells eTextbooks and provides tutors.

This year, analysts are forecasting 64% surge in net to 46 cents a share from 28 cents the year before. Net for the upcoming third quarter should leap 200%  to 3 cents a share from  one cent the year before. It is a seasonally slow quarter.

Profits for the fourth quarter are projected to climb 33% to 20 cents a share from the 15 cents the year before. The highest estimate is at 23 cents a share.

Looking out to 2009, the Street  predicts a 30% leap in net to 60 cents a share from  the anticipated 46 cents this year. The stock sells with a price-earnings ratio of 66. That is okay given the strong earnings outlook.  The company has beat the Street estimate the past four quarters by 4 cents a share, one cent, two cents and one cent.

Over the last 12 months, the Chegg has soared 116% versus a 18% gain for the stock market. CHGG's stock recently drove higher to breakout from its 11-week flat base. Its momentum indicator is strongly bullish.

We are targeting the stock for a move to $38 within the next few months, or sooner. A protective top can be placed near $28.50. The stock is most suitable for aggressive bulls.

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