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Chegg (CHGG) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Chegg (CHGG - Free Report) closed at $65.65, marking a +0.18% move from the previous day. This change outpaced the S&P 500's 0.05% gain on the day. Elsewhere, the Dow gained 0.48%, while the tech-heavy Nasdaq lost 0.61%.

Prior to today's trading, shares of the provider of online textbook rental services had lost 14.74% over the past month. This has lagged the Computer and Technology sector's gain of 0.29% and the S&P 500's loss of 0.52% in that time.

Investors will be hoping for strength from CHGG as it approaches its next earnings release. The company is expected to report EPS of $0.12, down 33.33% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $143.89 million, up 52.83% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.27 per share and revenue of $612.93 million, which would represent changes of +39.56% and +49.16%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for CHGG. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 1.85% higher. CHGG is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that CHGG has a Forward P/E ratio of 51.65 right now. For comparison, its industry has an average Forward P/E of 81.98, which means CHGG is trading at a discount to the group.

Meanwhile, CHGG's PEG ratio is currently 1.72. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software industry currently had an average PEG ratio of 4.94 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 170, putting it in the bottom 34% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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