Chegg

CHGG

Market cap $143M

Chegg, Inc. CHGG is navigating a shifting higher education landscape characterized by enrollment volatility, rising competition from AI-driven learning platforms and evolving student preferences. Due to these aspects, the company's top line has been under pressure for some time now.

Chegg, Inc. CHGG witnessed a gloomy second quarter of 2025, with revenues of $105.1 million being down 36% year over year and subscription services revenues falling 39% to $89.7 million. The subscriber base plunged 40% to 2.6 million, largely due to lower traffic stemming from Google's AI Overviews.

If you are looking for stocks that have gained strong momentum recently but are still trading at reasonable prices, Chegg (CHGG) could be a great choice. It is one of the several stocks that passed through our 'Fast-Paced Momentum at a Bargain' screen.

The increased demand for AI tools across digital learning is substantially reducing traffic for basic subscription models, such as question-and-answer (Q&A) models, offered by ed techs like Chegg, Inc. CHGG. Given this sudden mass shift, the company is currently working on incorporating AI into its business model through its diversified service offerings, including Chegg Study, Chegg Skills and Busuu, and shifting away from its Q&A-based subscription model.

With AI-based learning alternatives gaining momentum in demand, Chegg, Inc. CHGG is undertaking several enhancement initiatives to stay ahead of the trend and enhance its revenue visibility. There are indeed market pressures in this field of business, with growing market competition and the need to offer services at favorable and attractive pricing.

The market's inclination toward digital learning, particularly AI-based alternatives, is favoring the edtech market and the firms operating within it, such as Chegg, Inc. CHGG and Udemy, Inc. UDMY. Additionally, the demand for personalized or adaptive learning in K-12, higher education and adult learning programs is also driving the industry.

Chegg (NYSE:CHGG) shares moved lower after it was revealed that the educational technology platform has agreed to $7.5 million to settle Federal Trade Commission (FTC) claims that it made it difficult for consumers to cancel recurring subscriptions. The FTC alleged that Chegg buried cancellation options on its website and imposed a confusing, cumbersome process, with internal communications indicating the company was aware of the difficulty.

The U.S. Federal Trade Commission sued educational technology company Chegg Inc for allegedly making it difficult to cancel subscriptions, according to court papers filed in San Jose, California on Monday.

Chegg (CHGG) could be a great choice for investors looking to buy stocks that have gained strong momentum recently but are still trading at reasonable prices. It is one of the several stocks that made it through our 'Fast-Paced Momentum at a Bargain' screen.

Chegg, Inc. CHGG is currently focusing on two primary growth areas: language learning and workplace readiness and upskilling, with the Busuu and Skills businesses serving as the primary growth engines in the upcoming years. Busuu is the language learning business that recently underwent AI integration, offering it a distinct edge in the market.