Why Chegg Plunged More Than 20% This Week
Shares of online education company Chegg (NYSE: CHGG) plunged as much as 25% this week, before settling into a 23% loss as of this writing on Friday. The education technology company reported earnings on Monday, May 5, delivering a miss on revenue but a beat on earnings per share. However, it was likely the forward commentary from management that caused such a precipitous decline.
In the first quarter, Chegg's revenue increased just 1.9% year over year, missing expectations, while adjusted (non-GAAP) earnings per share of $0.32 actually beat expectations.
More concerning than the quarter, however, was management's outlook, which was lowered significantly relative to the guidance delivered on the prior fourth-quarter call. For the full year, Chegg now expects revenue between $740 million and $770 million, down from the prior outlook given back in February of $830 million to $850 million.
Source Fool.com
