Chegg falls on Morgan Stanley downgrade
20/11/2023 15:44
** Shares of education technology company Chegg CHGG.N
drop 8.1% to $9.61 after Morgan Stanley downgrades to
"underweight"
** MS says YoY growth in co's web traffic declining since
August; latest web traffic and app download data conflict with
co's commentary on customer retention improvement
** Subscriber additions have worsened in Q3 FY23 compared to
Q3 in previous years, yet co's Q4 outlook implies "dramatic
improvement" - MS
** It says gross subscriber additions are pressured even
though co highlights stable consumer retention trends
** Brokerage sees potential headwinds from "frugal" students
as co raises study bundle prices
** Of the 17 analysts covering stock, one has "buy" rating,
14 "hold" and two "sell"; median PT stands at $10 - LSEG data
** Stock down 62% this year
(Reporting by Purvi Agarwal in Bengaluru)
((Purvi.Agarwal@thomsonreuters.com))