UPDATE: Piper Sandler Downgrades Chegg (CHGG) to Neutral on Clouded Visibility

Piper Sandler analyst Arvind Ramnani downgraded Chegg (NYSE: CHGG) from Overweight to Neutral with a price target of $45.00 (from $107.00).

The analyst comments "CHGG’s 3Q results were roughly in-line with expectations; however, 4Q guidance and FY22 commentary was disappointing. Underpinning the pressured outlook were a few key headwinds that reduce demand for Chegg's services: lower student enrollment, students opting for fewer & easier classes (pass/fail grades), and professors assigning less homework–all part of post-COVID trends. Management saw a sharp turn in September and indicated that these trends may persist through CY22. We are accordingly lowering our rating on CHGG to Neutral and our PT to $54 ($107 prev); while valuation is attractive at 10.5x CY23E EV/S, we would look for improving fundamentals to get more constructive. In our view, TWOU is likely to see similar headwinds and are cautious on 2U until they report earnings on 11/9."

For an analyst ratings summary and ratings history on Chegg click here. For more ratings news on Chegg click here.

Shares of Chegg closed at $62.76 yesterday.

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