Would it be crazy to buy ahead of earnings? I agree with Holdenmijunk, I can't find a damn bit of good news on the company; I've resulted to scouring Facebook comments, Alexa, and education forums to see any sort of review on the company. Kinda frustrating. I've had this on my watchlist since the post-ipo drop and actually had a buy set for $8.10, but removed that after I bought in to FB. So confounded!
I am inclined to hold for similar reasons as wnatmorejohn. On the negative side....i have not seen much volume. The sells offs are on such light volume we have seen some consecutive 3 and 4% down days.. I thought a bottom was placed 6.32 but I was wrong last time I called a bottom.
My biggest problem is; there is no communication from this company or the analysts who brought it to IPO. You cant find a damn bit of good news and you cant find many people who even know what this company is about. It is not a household name in my books. The covering analysts are off by more than 30% with there recommendations and have not even poked their head out to reassure their clients.
I am averaged at about 7.40 for almost 4k shares, I am not looking for a home run...but not looking to hold a turd for 7 months to make a couple k . All in all I hope we hear good things tomorrow.
I do have worries about the same negatives but then again they are probably more focused on building long term value than worrying what theit stock price is doing. Their execs have Netflix and Paypal blood across the board so used to early days of these type of companies. Also they are only covered by their underwriters and small group of analysts and to their credit they came out last year with estimated of $12-14 but the market punished them more. I think Chegg will make big annoucements in the future and they are trying hard to get their technology part of the business growing QoQ. I just hope they don't have any surprises for the market given how recent they went IPO which will make people punish them and tank hard. This is minimum $300M FY14 revenue stock with subscription base so do the math and i wonder when this year it will hold up to its true enterprise value.
I am holding based on the following: if you look at their previous growth both from prior quarter in 2012 and prior years they are in the 20-30% which automatically puts them at well above analyst estimates of $75M this quarter. Given that this is a subscription business with recurring revenue i would suspect that to continue. Now as for price and competitive pressures that they may be facing, that could have be taken negatively if they forecast with caution or scale back which could trigger a sell off. But the reality is not many people know these guys, their management team, and their potential revenue drivers. My guess would be the market will overreact on any poor comments so hope there is more positive outlook than focus on what Amazon and the rest are doing on the book rental side. Lastly, any news of their over 32 patents waiting for approval will make this thing go up and remember insiders loaded up on this in mid november post IPO at prices between $8-10 knowing that most of their revenue was already booked for 4th quarter given the way they account for a full quarter in 4th quarter each year. I am holding and despite any setback long on Chegg.
I am modestly in the green and holding through the earnings call. The shares have been sold hard since the ipo and I would think the negative feeling could lead to a significant rally with even a hint of good news. I will see on the 13th
If they announce a partnership with Apple (iPAD) and/or AMZN (Kindle), call them Student Editions, and stock will go through the roof!! Education is big big market with no major player. Apple sold several hundred million dollars worth of iPADs to K - 12. Now everybody from elementary school out is required to have a device for online learning and bring the devices to school couple of days a week. Schools subscribing to online teaching content and providing students free access, that will take off easily !!. SOO - all CHEGG will do is partner with tablet makers and start buying up these education content companies for pittance..