Chegg (CHGG) Chegg Shares Plummeted 27% Following Disappointing Q4 Guidance
Chegg (NYSE: CHGG) shares were trading more than 27% lower after-hours after the company reported disappointing third-quarter results and warned for the fourth quarter.
The company reported Q3 results, with EPS coming in at $0.20, in line with the consensus estimate. Quarterly revenue grew 12% year-over-year to $171.9 million (vs. Street’s $174.54 million), with Chegg Services revenues up 23% year-over-year to $146.8 million, representing 85% of total net revenues (vs. 77% in Q3/20).
According to Dan Rosensweig, the CEO & President of Chegg, the company experienced extraordinary growth in the last year and a half, however, in late September it became clear that the education industry is experiencing a slowdown, which the company believes is temporary and is a result of the COVID-19.
The company provided its Q4 outlook, expecting revenue in a range of $194-196 million, which is significantly lower than the consensus estimate of $240.6 million. For the full 2021-year, the company anticipates total revenue to be $762-$764 million, with Chegg Services revenue ranging from $657 to $659 million.