Chegg (CHGG) closed the most recent trading day at $74.30, moving +1.2% from the previous trading session. The stock outpaced the S&P 500’s daily gain of 0.74%. Meanwhile, the Dow gained 0.43%, and the Nasdaq, a tech-heavy index, added 1.67%.
Coming into today, shares of the provider of online textbook rental services had gained 13.04% in the past month. In that same time, the Computer and Technology sector gained 4.01%, while the S&P 500 gained 5.51%.
CHGG will be looking to display strength as it nears its next earnings release, which is expected to be August 3, 2020. The company is expected to report EPS of $0.34, up 47.83% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $136.76 million, up 45.7% from the year-ago period.
CHGG’s full-year Zacks Consensus Estimates are calling for earnings of $1.20 per share and revenue of $554.05 million. These results would represent year-over-year changes of +31.87% and +34.83%, respectively.
It is also important to note the recent changes to analyst estimates for CHGG. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.08% higher. CHGG currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, CHGG is holding a Forward P/E ratio of 60.97. This represents a discount compared to its industry’s average Forward P/E of 73.17.
Investors should also note that CHGG has a PEG ratio of 2.03 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. Internet – Software stocks are, on average, holding a PEG ratio of 3.93 based on yesterday’s closing prices.
The Internet – Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 97, putting it in the top 39% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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