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what it is
Chegg sells homework help, writing tools, math help, textbook access, and language lessons online.
how it gets paid
Last year Chegg made $377M in revenue. Chegg Study Pack was the main engine at $160M, or 42% of sales.
why growth slowed
Revenue fell 39.0% last year. The number that mattered was $304M. It was big enough to look stable and weak enough to leave EPS at -$0.66.
what just happened
Chegg posted $304M of revenue, but EPS still came in at -$0.66.
At a glance
C+ balance sheet — struggling to keep the lights on
15/100 earnings predictability — expect surprises
12.1% return on capital — nothing to write home about
-$2.92 fy2024 eps est
$618M fy2024 rev est
xvary composite: 28/100 — weak
What they do
Chegg sells homework help, writing tools, math help, textbook access, and language lessons online.
Chegg has 1,241 employees, not a campus. You tap a homework question and pay for help in the same minute. That is why the app matters more than the buildings.
How they make money
$377M
annual revenue · their business grew -39.0% last year
Chegg Study Pack
$160M
Chegg Study
$95M
Chegg Writing
$55M
Chegg Math
$40M
Busuu
$27M
The products that matter
homework help subscription
Chegg Study
$226M · -39%
this is still the core paid product, but revenue fell 39% last year as free AI answers got good enough for a lot of students.
legacy cash engine
b2b skills training
Chegg Skills
$113M · new segment
this is the second-act bet. management guided to $17.5M of Q1 2026 revenue, which tells you it matters, but it is not large enough to carry the company yet.
turnaround bet
textbook and materials business
Required Materials
$38M · -39%
it's the smallest piece shown here, and it is shrinking at the same 39% rate as subscriptions. there is no hidden stabilizer in this segment.
non-core
Key numbers
$377M
annual revenue
This is the size of the business after the collapse. You compare every expense and lawsuit against this number.
39.0%
sales drop
Chegg lost 39% of revenue vs. prior year. That is the punchline and the problem.
60.2%
gross margin
Chegg kept 60 cents of each sales dollar before overhead. That sounds decent until the next number hits.
31.0%
operating margin
For every $1 of sales, Chegg lost 31 cents at the operating level. That is what a broken cost structure looks like.
Financial health
C+
strength
- balance sheet grade C+ — weak — may struggle to fund operations
- risk rank 5 — safer than 5% of stocks
- price stability 5 / 100
- long-term debt $15M (19% of capital)
C+ — below average. watch for debt servicing and cash burn.
Total return vs. market
Return history isn't available for CHGG right now.
source: institutional data · return history unavailable
What just happened
missed estimates
Chegg posted $304M of revenue, but EPS still came in at -$0.66.
Revenue was up 291% from a weak base, and gross margin held at 60.2%. Even so, annual revenue finished at $377M, down 39.0% vs. prior year.
$304M
revenue
-$0.66
eps
60.2%
gross margin
revenue
The number that mattered was $304M. It was big enough to look stable and weak enough to leave EPS at -$0.66.
source: company earnings report, 2026
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What could go wrong
the top risk is AI replacing paid homework help faster than skills can replace the lost revenue.
high
AI substitution in Chegg Study
Free AI tools are directly attacking the paid answer model. Services revenue fell 39% last year to $226M.
puts the core $226M revenue stream under pressure
high
skills pivot fails to scale
Chegg Skills is the replacement story, but management only guided to $17.5M in Q1 2026 revenue. That is progress, not proof.
leaves the company trying to outrun a decline with too small a new engine
med
platform and legal dependence
The 2025 lawsuit against Alphabet over AI Overviews shows how exposed Chegg is to platform behavior it does not control.
adds legal cost while highlighting how much distribution power sits elsewhere
Between the $226M services stream under pressure, the $38M materials business also falling 39%, and Q1 revenue guided to just $60M–$62M, the turnaround math is unforgiving.
source: institutional data · regulatory filings · risk analysis
Pay attention to
calendar
Q1 2026 earnings report
The next report is the immediate test. Watch whether total revenue lands inside the $60M–$62M guide and whether gross margin holds in the 57–58% range.
metric
Chegg Skills revenue
The company pointed to $17.5M of Q1 2026 skills revenue. If that number disappoints, the replacement-business thesis weakens immediately.
trend
legacy decline rate
Services and required materials both fell 39%. You want to see that decline slow before you call this a recovery.
risk
AI and platform fallout
The Alphabet lawsuit matters because it makes the competitive threat tangible. Any update here tells you how much pressure is external versus self-inflicted.
Analyst rankings
earnings predictability
15 / 100
in human-speak, analysts do not trust this business to produce steady numbers from quarter to quarter.
risk rank
5
this sits near the bottom of the safety stack. you are being paid in optionality, not stability.
source: institutional data
Institutional activity
institutional ownership data for CHGG is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$1
current price
n/a
target midpoint · n/a from current
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