What Happened?
Shares of online study and academic help platform Chegg (NYSE: CHGG) fell 10.5% in the afternoon session after a bearish consensus view from Wall Street analysts weighed on investor sentiment.
The negative outlook is based on a consensus from 5 analysts covering the stock, who have collectively issued a "Sell" rating. Their average price target is set at $1.70, forecasting a potential 0.58% decrease in the stock's price over the next year. This general view from analysts suggests they believe the stock is likely to underperform the broader market, which appears to be pressuring the shares.
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What Is The Market Telling Us
Chegg’s shares are extremely volatile and have had 98 moves greater than 5% over the last year. But moves this big are rare even for Chegg and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 7.7% on the news that investor optimism picked up as the company focused on transforming its core academic product, Chegg Study, into an AI-powered Personalized Learning Assistant.
The education technology company is in the process of revamping its main offering to function as a personalized learning coach, aiming to improve learning effectiveness for students. Further fueling positive sentiment, Chegg announced plans to launch two new core capabilities for the platform in September 2025. This strategic pivot towards artificial intelligence and the upcoming product enhancements appear to be resonating with investors, who are bidding up the shares in anticipation of future growth.
Chegg is down 8.6% since the beginning of the year, and at $1.54 per share, it is trading 42.1% below its 52-week high of $2.65 from December 2024. Investors who bought $1,000 worth of Chegg’s shares 5 years ago would now be looking at an investment worth $23.25.
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