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Consumer Subscription Stocks Q1 Recap: Benchmarking Chegg (NYSE:CHGG)


Petr Huřťák /
2024/06/10 2:01 pm EDT

Looking back on consumer subscription stocks' Q1 earnings, we examine this quarter's best and worst performers, including Chegg (NYSE:CHGG) and its peers.

Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.

The 8 consumer subscription stocks we track reported a weaker Q1; on average, revenues beat analyst consensus estimates by 0.9%. while next quarter's revenue guidance was 2.8% below consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and consumer subscription stocks have had a rough stretch, with share prices down 14.6% on average since the previous earnings results.

Weakest Q1: Chegg (NYSE:CHGG)

Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.

Chegg reported revenues of $174.4 million, down 7.1% year on year, in line with analysts' expectations. It was a weak quarter for the company, with a decline in its users and slow revenue growth.

“Nathan has been core to Chegg’s success from our earliest days as a textbook rental company, to leveraging AI today to create a truly personalized learning assistant,” said Dan Rosensweig, CEO & President of Chegg, Inc.

Chegg Total Revenue

Chegg delivered the slowest revenue growth of the whole group. The company reported 4.7 million users, down 7.8% year on year. The stock is down 49.7% since the results and currently trades at $3.61.

Read our full report on Chegg here, it's free.

Best Q1: Roku (NASDAQ:ROKU)

Spun out from Netflix, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.

Roku reported revenues of $881.5 million, up 19% year on year, outperforming analysts' expectations by 3.7%. It was a mixed quarter for the company, with strong growth in its users but slow revenue growth.

Roku Total Revenue

Roku scored the biggest analyst estimates beat among its peers. The company reported 81.6 million monthly active users, up 14% year on year. The stock is down 7.8% since the results and currently trades at $57.9.

Is now the time to buy Roku? Access our full analysis of the earnings results here, it's free.

Match Group (NASDAQ:MTCH)

Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ:MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.

Match Group reported revenues of $859.6 million, up 9.2% year on year, in line with analysts' expectations. It was a weak quarter for the company, with a decline in its paying users and underwhelming revenue guidance for the next quarter.

The stock is up 0.9% since the results and currently trades at $31.77.

Read our full analysis of Match Group's results here.

Coursera (NYSE:COUR)

Founded by two Stanford University computer science professors, Coursera (NYSE:COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.

Coursera reported revenues of $169.1 million, up 14.5% year on year, falling short of analysts' expectations by 0.8%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and slow revenue growth.

Coursera had the weakest performance against analyst estimates and weakest full-year guidance update among its peers. The company reported 148 million users, up 19.4% year on year. The stock is down 39.1% since the results and currently trades at $7.25.

Read our full, actionable report on Coursera here, it's free.

Udemy (NASDAQ:UDMY)

With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ:UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.

Udemy reported revenues of $196.8 million, up 11.6% year on year, in line with analysts' expectations. It was a weak quarter for the company, with slow revenue growth and full-year revenue guidance missing analysts' expectations.

The company reported 1.44 million active buyers, up 3.6% year on year. The stock is down 11.6% since the results and currently trades at $8.74.

Read our full, actionable report on Udemy here, it's free.

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