We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Chegg Buys Math App Startup Cogeon to Drive Student Outcome
Read MoreHide Full Article
Chegg, Inc. (CHGG - Free Report) — a well-known California-based education provider — recently finalized a strategic acquisition deal with Berlin-based Cogeon GmbH, a provider of adaptive math technology and developer of the math app, Math 42.
The acquisition, which was announced on Oct 18, was somewhat not reflected in Chegg’s share price movement. In fact, on Oct 19, shares of Chegg lost around 0.8% to end at $15.69.
The Deal
The buyout of the math app startup, owned by Brothers Maxim and Raphael Nitsche, was closed for 12.5 million euros (approximately $15 million). Chegg also announced that Nitsche will receive an additional 10.7 million euros in cash and stock over the next three years.
Buyout Synergies
The buyout will help Chegg provide self-guided and individualized math solutions to more students, making student outcome more efficient.
In line with Chegg’s mission, the acquisition will facilitate the company’s plans to leverage on Cogeon's unique A.I.-driven math technology that would enhance potentiality of Chegg Study. The company further plans on launching an integrated product, Chegg Math, in the second half of 2018. However, Chegg does not expect this acquisition to materially impact its 2017 operations.
Notably, both education and workforce space in the United States is plagued by a large-scale deficiency in math-based knowledge and skills. In response to this, Chegg has been focused on acquiring various self-guided tools to assure a qualitative development of its students.
The company also focuses on delivering high-quality and low-cost educational products and services for students. Chegg provides its students with online, on-demand human help for different courses at college and high school levels. All these factors are the major determinants for the company’s growth, as is reflected in its robust top-line performance.
In fact, in the last reported quarter, net revenue was $56 million, up 6.3% year over year. Net revenue also surpassed the Zacks Consensus Estimate of $53 million by 5.7%. The company reported adjusted loss of 4 cents in second-quarter 2017, narrower than the consensus estimate of a loss of 5 cents.
Stock Price Movement
Shares of Chegg have massively outperformed its industry year to date. The stock has rallied 112.6% compared with the industry’s gain of 23.4%. Furthermore, the company’s earnings for the current quarter and year are projected to increase 90.5% and 157.1%, respectively. The company also surpassed earnings estimates in three of the trailing four quarters, with an average positive surprise of 41.48%.
However, over the last 60 days, current-year earnings estimates moved down 8% for this Zacks Rank #4 (Sell) company.
Stocks to Consider
A few better-ranked stocks in the industry are eGain Corporation (EGAN - Free Report) , HubSpot, Inc. (HUBS - Free Report) and MINDBODY, Inc. .
eGain Corporation’s current-year earnings are expected to grow 4.6%.
Current-year earnings for HubSpot are likely to increase 123.7%.
MINDBODY’s estimated growth rate for current-year earnings is pegged at 75.7%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Chegg Buys Math App Startup Cogeon to Drive Student Outcome
Chegg, Inc. (CHGG - Free Report) — a well-known California-based education provider — recently finalized a strategic acquisition deal with Berlin-based Cogeon GmbH, a provider of adaptive math technology and developer of the math app, Math 42.
The acquisition, which was announced on Oct 18, was somewhat not reflected in Chegg’s share price movement. In fact, on Oct 19, shares of Chegg lost around 0.8% to end at $15.69.
The Deal
The buyout of the math app startup, owned by Brothers Maxim and Raphael Nitsche, was closed for 12.5 million euros (approximately $15 million). Chegg also announced that Nitsche will receive an additional 10.7 million euros in cash and stock over the next three years.
Buyout Synergies
The buyout will help Chegg provide self-guided and individualized math solutions to more students, making student outcome more efficient.
In line with Chegg’s mission, the acquisition will facilitate the company’s plans to leverage on Cogeon's unique A.I.-driven math technology that would enhance potentiality of Chegg Study. The company further plans on launching an integrated product, Chegg Math, in the second half of 2018. However, Chegg does not expect this acquisition to materially impact its 2017 operations.
Notably, both education and workforce space in the United States is plagued by a large-scale deficiency in math-based knowledge and skills. In response to this, Chegg has been focused on acquiring various self-guided tools to assure a qualitative development of its students.
The company also focuses on delivering high-quality and low-cost educational products and services for students. Chegg provides its students with online, on-demand human help for different courses at college and high school levels. All these factors are the major determinants for the company’s growth, as is reflected in its robust top-line performance.
In fact, in the last reported quarter, net revenue was $56 million, up 6.3% year over year. Net revenue also surpassed the Zacks Consensus Estimate of $53 million by 5.7%. The company reported adjusted loss of 4 cents in second-quarter 2017, narrower than the consensus estimate of a loss of 5 cents.
Stock Price Movement
Shares of Chegg have massively outperformed its industry year to date. The stock has rallied 112.6% compared with the industry’s gain of 23.4%. Furthermore, the company’s earnings for the current quarter and year are projected to increase 90.5% and 157.1%, respectively. The company also surpassed earnings estimates in three of the trailing four quarters, with an average positive surprise of 41.48%.
However, over the last 60 days, current-year earnings estimates moved down 8% for this Zacks Rank #4 (Sell) company.
Stocks to Consider
A few better-ranked stocks in the industry are eGain Corporation (EGAN - Free Report) , HubSpot, Inc. (HUBS - Free Report) and MINDBODY, Inc. .
While eGain Corporation flaunts a Zacks Rank #1 (Strong Buy), HubSpot and MINDBODY carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
eGain Corporation’s current-year earnings are expected to grow 4.6%.
Current-year earnings for HubSpot are likely to increase 123.7%.
MINDBODY’s estimated growth rate for current-year earnings is pegged at 75.7%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>