Chegg Inc. (CHGG:NYE) Analysts Slash Targets on Earnings/GPT

Analyst Ratings Changes:

Four analyst’s releases their ratings changes for Chegg’s stock today after the company reported it’s quarterly earnings and raised concern over Chat GPT affecting sales.

  1. Northland Capital – Downgraded Chegg to Market Perform and set a price target of USD 15. This means that they believe the stock will perform in line with the market average and have lowered their expectations for the company’s future growth.
  2. Jefferies & Company – Downgraded Chegg to Hold and lowered their price target from USD 25 to USD 11. This indicates that they believe the stock is no longer a buy and that there is limited upside potential.
  3. Morgan Stanley & Co. – Maintained their Equal-Weight rating on Chegg and lowered their price target from USD 18 to USD 12. This means that they believe the stock is fairly valued and that there is no significant upside potential at the current price.
  4. Piper Jaffray Companies – Maintained their Neutral rating on Chegg and lowered their price target from USD 17 to USD 11. This suggests that they do not have a strong opinion on the stock and that it is not a top pick.

The analyst ratings currently  suggest that there is limited upside potential for Chegg’s stock in the near term, and that the company may struggle to meet growth expectations. The downgrades from Northland Capital and Jefferies & Company in particular indicate a shift in sentiment towards the company, and suggest that investors may be cautious about its future prospects.

ChatGPT

On Monday evening, Chegg executives revealed that they are beginning to lose market share to ChatGPT, an AI-based platform that is gaining popularity among students. Chegg CEO, Dan Rosensweig, stated that they have seen a significant spike in student interest in ChatGPT, and it is now having an impact on the company’s new customer growth rate. This announcement caused Chegg’s stock to tank, falling almost 50 percent on Tuesday.

Chegg is an online learning platform that provides a range of educational services, including textbook rentals, online tutoring, and homework help. The company has seen rapid growth in recent years, thanks to the increasing demand for online learning services. However, the emergence of new AI-based platforms like ChatGPT is posing a serious threat to Chegg’s market dominance.

ChatGPT is an AI-powered chatbot that can answer questions and provide guidance on a wide range of academic subjects. The platform uses natural language processing and machine learning to understand student queries and provide personalized responses. With its intuitive interface and round-the-clock availability, ChatGPT has quickly gained popularity among students looking for quick and easy solutions to their academic problems.

The rise of ChatGPT is indicative of a broader trend towards the use of AI in education. As AI technology continues to improve, it is expected to play an increasingly important role in the way students learn and access educational resources. This could have significant implications for traditional education providers like Chegg, which may struggle to compete with more innovative and tech-savvy platforms.

Chegg’s acknowledgement of the impact of ChatGPT on its customer growth rate is a clear indication that the company is feeling the heat from the competition. However, it remains to be seen whether Chegg will be able to adapt and stay ahead of the curve. The company has a strong track record of innovation and has invested heavily in technology and product development. But with the rise of new and disruptive technologies like AI, it is clear that the online education landscape is changing rapidly, and companies like Chegg will need to be nimble and responsive in order to stay ahead.

 

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