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 (CHGG) Boosts Math Offerings With Mathway Acquisition
Read MoreHide Full Article
Chegg, Inc. (CHGG - Free Report) has acquired a premier global math solver — Mathway — for approximately $100 million in cash, in a bid to expand its subject coverage, languages and international reach.
Introduction to Mathway
In recent times, math deficiency is one of the large-scale issues prevalent in both education and workforce preparedness. Per the latest OECD rankings, the United States holds 37th rank in terms of math proficiency, among other developed countries.
Mathway — one of the highest-rated education mobile apps — has subscribers in about 100 countries and has been localized in 13 languages. Mathway has been a critical app for both learning and instruction. Notably, its ‘Ask an Expert - Live’ feature allows users that are struggling with a concept to get immediate support.
Mathway indulges in a vast range of subject areas and more than 400 different topics, which include pre-algebra, algebra, trigonometry, pre-calculus, calculus, and linear algebra, and related disciplines. Nearly 50% of its users are in high school, and 1 in 10 is a teacher/professor/parent.
Mathway helps millions of students with an easy-to-use solver that offers step by step instruction to teach both simple and complex mathematics. In 2019, it solved more than 1.3 billion problems for learners.
Acquisition Synergies
In addition to the 100-million cash payment, Chegg may pay up to $15 million additional payments to Mathway over the next three years, subject to performance and other contingencies. Chegg’s direct to the student, always available, and step by step instruction model will scale up Mathway’s innovative efforts to help millions of students at a time when math proficiency is a foundational and critical pillar of learning around the world.
In 2019, Mathway generated net revenues of approximately $13 million. Chegg expects Mathway to contribute $0.5 million to revenues (after the effect of the fair-value adjustment). Also, it projects $0.5 million adjusted EBITDA loss from Mathway.
Acquisitions to Boost Performance
Since July 2010, the company has been expanding offerings through the acquisition of companies like Thinkful, WriteLab, StudyBlue, Cogeon, the developer of the math application Math 42, Imagine Easy Solutions, and internships.com. Also, it has been integrating its efficiencies with supplemental materials including Chegg Study, Chegg Writing, Chegg Tutors, and Chegg Math Solver.
Chegg has been making strategic investments in Chegg Services that are expected to drive profits in the upcoming periods. Rising popularity of online courses at various levels bodes well for the company, especially in this challenging period. Its strategy of delivering high-quality and low-cost educational services is also encouraging.
Shares of Chegg have outperformed the industry in the year-to-date period. Furthermore, the company’s earnings for first-quarter 2020 jumped 46.7% from a year ago. Also, revenues grew 35% year over year. The solid performance was primarily backed by year-over-year subscriber growth of 35%.
For the second quarter, it expects total revenues between $135 million and $137 million, Chegg Services revenues within $115-$117 million, gross margin of 74-75%, and adjusted EBITDA between $48 million and $50 million.
We believe the trend will continue in the upcoming quarters as well, given the above-mentioned tailwinds and the latest acquisition.
Anaplan and Everbridge’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average being 32.1% and 44.5%, respectively.
Datadog’s earnings growth rate for the current year is projected at 400%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
Chegg (CHGG) Boosts Math Offerings With Mathway Acquisition
Chegg, Inc. (CHGG - Free Report) has acquired a premier global math solver — Mathway — for approximately $100 million in cash, in a bid to expand its subject coverage, languages and international reach.
.jpg)
Introduction to Mathway
In recent times, math deficiency is one of the large-scale issues prevalent in both education and workforce preparedness. Per the latest OECD rankings, the United States holds 37th rank in terms of math proficiency, among other developed countries.
Mathway — one of the highest-rated education mobile apps — has subscribers in about 100 countries and has been localized in 13 languages. Mathway has been a critical app for both learning and instruction. Notably, its ‘Ask an Expert - Live’ feature allows users that are struggling with a concept to get immediate support.
Mathway indulges in a vast range of subject areas and more than 400 different topics, which include pre-algebra, algebra, trigonometry, pre-calculus, calculus, and linear algebra, and related disciplines. Nearly 50% of its users are in high school, and 1 in 10 is a teacher/professor/parent.
Mathway helps millions of students with an easy-to-use solver that offers step by step instruction to teach both simple and complex mathematics. In 2019, it solved more than 1.3 billion problems for learners.
Acquisition Synergies
In addition to the 100-million cash payment, Chegg may pay up to $15 million additional payments to Mathway over the next three years, subject to performance and other contingencies. Chegg’s direct to the student, always available, and step by step instruction model will scale up Mathway’s innovative efforts to help millions of students at a time when math proficiency is a foundational and critical pillar of learning around the world.
In 2019, Mathway generated net revenues of approximately $13 million. Chegg expects Mathway to contribute $0.5 million to revenues (after the effect of the fair-value adjustment). Also, it projects $0.5 million adjusted EBITDA loss from Mathway.
Acquisitions to Boost Performance
Since July 2010, the company has been expanding offerings through the acquisition of companies like Thinkful, WriteLab, StudyBlue, Cogeon, the developer of the math application Math 42, Imagine Easy Solutions, and internships.com. Also, it has been integrating its efficiencies with supplemental materials including Chegg Study, Chegg Writing, Chegg Tutors, and Chegg Math Solver.
Chegg has been making strategic investments in Chegg Services that are expected to drive profits in the upcoming periods. Rising popularity of online courses at various levels bodes well for the company, especially in this challenging period. Its strategy of delivering high-quality and low-cost educational services is also encouraging.
Shares of Chegg have outperformed the industry in the year-to-date period. Furthermore, the company’s earnings for first-quarter 2020 jumped 46.7% from a year ago. Also, revenues grew 35% year over year. The solid performance was primarily backed by year-over-year subscriber growth of 35%.
For the second quarter, it expects total revenues between $135 million and $137 million, Chegg Services revenues within $115-$117 million, gross margin of 74-75%, and adjusted EBITDA between $48 million and $50 million.
We believe the trend will continue in the upcoming quarters as well, given the above-mentioned tailwinds and the latest acquisition.
Zacks Rank & Other Key Picks
Currently, Chegg carries a Zacks Rank #1 (Strong Buy). Other top-ranked stocks from the same industry include Anaplan, Inc. , Datadog, Inc. (DDOG - Free Report) and Everbridge, Inc. (EVBG - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Anaplan and Everbridge’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average being 32.1% and 44.5%, respectively.
Datadog’s earnings growth rate for the current year is projected at 400%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>