Chegg, Inc. (NYSE:CHGG) Faces Financial Challenges Ahead of Q4 Earnings Release

Core Viewpoint - Chegg is facing significant financial challenges, with anticipated Q4 earnings showing a negative EPS and declining revenue due to increased competition and a drop in subscribers [1][2][4] Financial Performance - The upcoming Q4 earnings are projected to have an EPS of -$0.11 and revenue of approximately $71 million [1][2] - Chegg experienced a 43% decline in revenue over the past year, indicating substantial revenue pressure [1][2] - In the previous quarter, Chegg exceeded expectations, with adjusted EPS doubling the Zacks Consensus Estimate and net revenues surpassing estimates by 1.8% [2] Financial Ratios - Chegg's negative P/E ratio stands at -0.97, indicating a lack of profitability [3][4] - The price-to-sales ratio is 0.17, suggesting that investors are paying 17 cents for every dollar of sales [3] - The enterprise value to sales ratio is 0.27, providing insight into Chegg's valuation relative to its revenue [3] - The enterprise value to operating cash flow ratio is 2.82, indicating how many times the operating cash flow can cover the enterprise value [3] Debt and Liquidity - Chegg's debt-to-equity ratio is 0.57, suggesting a moderate level of debt relative to equity [4] - The current ratio is 0.95, indicating that Chegg has slightly less current assets than current liabilities, which may impact its short-term financial health [4] Strategic Focus - Chegg's long-term strategy involves focusing on AI and Chegg Skilling, aiming to move beyond traditional study methods [2]