Could Chegg's Busuu Expansion in LATAM Spark Its Next Growth Run?

Core Insights - Chegg, Inc. has officially split its business into two segments: a growth-oriented Chegg Skilling and a legacy academic services unit, aiming to leverage its language-learning platform, Busuu [2][4] Business Strategy - Chegg is focusing on expanding Busuu into Latin America (LATAM), targeting B2B skilling opportunities while moving away from its struggling academic services [3][4] - Busuu's unique approach to language learning emphasizes conversational fluency, aligning with enterprise demand for practical communication skills [3][4] Financial Performance - Chegg Skilling is projected to generate approximately $70 million in revenue by the end of 2025, with a year-over-year growth rate in the mid-teens [5][8] - The company has implemented aggressive cost restructuring, allowing for selective investments in expansion without straining cash flow [5][8] Market Position - Chegg's stock has increased by 13.5% over the past month, outperforming the Zacks Internet - Software industry and the S&P 500 Index [6][8] - The company is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 5.57, significantly lower than competitors like Duolingo and Coursera, which have P/E ratios of 43.67 and 15.88, respectively [10][11] Earnings Estimates - The Zacks Consensus Estimate for Chegg's 2025 loss has widened to 14 cents, while estimates for 2026 earnings have improved to 18 cents [12][13] - The 2025 estimate indicates a year-over-year decline of 118.7%, while the 2026 estimate suggests a growth of 228.6% [13]