Chegg is down more than 30% over the past year.
Sarah Kerver/Getty Images for Chegg.comChegg, the education technology firm, was falling sharply in early trading Tuesday after disappointing investors with weak guidance.
Shares were down 24% in premarket trading to $16. Chegg (ticker: CHGG) has dropped close to 17% so far in 2023, as of Monday’s close.
Analysts at KeyBanc, led by Jason Celino, lowered their rating on the stock to Sector Weight from Overweight after the results. They said that fourth-quarter performance which slightly beat expectations wasn’t a problem, but that guidance for 2023 total revenue of between $745 million and $760 million was a meaningful miss.
Analysts expect full-year 2023 sales of $782 million, according to FactSet data.
The firm probably won’t be as profitable as previously thought, Keybanc said. It may revisit its thesis if the company can get back to double digit growth, improve margins, and concerns over a threat from artificial intelligence software ChatGPT are overcome.
Chegg reported adjusted earning of 40 cents per share in the fourth quarter, beating estimates of 38 cents per share. Revenue fell 1% year-over-year to $205.2 million but beat expectations of $202.1 million.
Write to Brian Swint at brian.swint@barrons.com