Chegg Stock: Crisis Mode Opportunity
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Chegg, Inc. is facing significant challenges due to the impact of AI on its business model, resulting in declining revenues and subscribers. Despite a 79% increase in questions asked, revenues fell by 13% YoY in Q3 '24. The company is restructuring to save $100-$120 million annually, but reduced R&D and marketing spending raises concerns about future growth and AI alignment.
November 19, 2024 | 5:00 pm
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Chegg is experiencing a crisis due to AI impacts, with declining revenues and subscribers. Despite a 79% increase in questions asked, Q3 '24 revenues fell 13% YoY. Restructuring aims to save $100-$120M annually, but reduced R&D and marketing spending raises growth concerns.
Chegg's declining revenues and subscribers, despite increased engagement through AI, indicate significant challenges. The restructuring plan to save costs may not be sufficient to offset the negative impact of reduced R&D and marketing on future growth. This suggests a likely short-term negative impact on the stock price.
CONFIDENCE 95
IMPORTANCE 90
RELEVANCE 100