Why Chegg Stock May Be a Buy After Plunging on Tuesday

Education company (NYSE: CHGG) saw its stock get nearly cut in half on Tuesday, following the company's first-quarter earnings release. The dramatic fall in the stock price came as Chegg used the earnings report to warn that it believed that artificial intelligence (AI) chatbot ChatGPT is having a negative impact on the company's growth rate in new customers.

But is the stock's massive decline an overreaction? Chegg CEO Dan Rosensweig thinks so -- and he's probably right.

First and foremost, it's worth noting that Chegg performed exceptionally well in Q1. First-quarter revenue rose 7% year over year to $187.6 million. This top-line figure came in ahead of analysts' consensus forecast for revenue of $185.2 million. Adjusted earnings per share of $0.27 was also better than analysts' average estimate for $0.26. 

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Source Fool.com