Chegg Inc. Common Stock (CHGG)

FairStock Score: 39/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

Chegg was once a high-margin subscription business. In fiscal 2023, the year ended 2023-12-31, it earned $18.2M on $716.3M of revenue. By fiscal 2025, the year ended 2025-12-31, revenue had fallen to $376.9M and net income was -$103.4M. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $51.8M against $105.1M in fiscal Q2 2025, the quarter ended 2025-06-30, while net income improved from -$35.7M to -$3.0M and diluted EPS from -$0.33 to -$0.03. That is a violent contraction. A durable moat should protect revenue and pricing; here it has not. Financial health is poor. FairStock's Piotroski F-Score is 4/9, Altman Z-Score is -5.42, trailing free cash flow is -$7.0M, and FCF yield is -8.8%. Debt-to-equity is 0.43, not crushing, but a $78.8M market cap and negative cash generation leave little room for error. Return on equity is -38.34%, though ROCE is 4.74%. Valuation is the main draw. At the 2026-10-13 close of $0.71, FairStock's P/B is 0.66 and P/E is -1.48. The stock sells below book, but book value can erode with losses. FairStock classifies it as a TURNAROUND—loss in the latest year after earlier profits—and I agree. Graham wanted a discount to proven earning power, not a discount to disappearing sales. Until revenue stabilizes and free cash flow turns positive, this is speculation, not a margin-of-safety bargain.

In plain English: Chegg sells online study help and writing tools to students. The business is much smaller than it used to be, and it lost money in its latest fiscal year, so the underlying business looks weak. The stock price is very low compared with its net assets, but falling sales and losses mean it is not clearly a bargain.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer