BUY Conviction4/5 Analysis quality80/100 Price target55 now
The YouTuber recommends buying Chegg, an online education platform, due to its significant price drop following a downward revision of guidance. He argues that despite current headwinds, the company still exhibits strong enrollment and services revenue growth, trades at a significantly lower valuation multiple compared to historical levels, and has a healthy balance sheet. The stock is also technically oversold.
“shares now trade for just 5.5 times revenue down from a high of 20 times last year and just half of the 9.5 times multiple it traded in over the three years through 2019 so so even that pre-pandemic multiple would take the share 72 percent higher from here.”