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Chegg Blames Slowdown On College Professors Not Grading Assignments
Demand for online tutoring wilts as fewer college homework assignments are being graded.
May 3, 2022
One month after it repurchased nearly $300 million of its own shares at approximately $32, Chegg, a direct-to-student digital learning platform, the stock plunged nearly 30% on disappointing earnings and guidance. The news got even worse for investors who read the company’s latest quarterly filing.
Besides the ill-timed accelerated share repurchase (ASR), Chegg blamed the tight labor market for the education’s industry’s slowdown. The company also highlighted that students who are attending college are taking fewer and less rigorous classes. Notably, professors are also assigning students fewer graded assignments.
Chegg signaled the deceleration in its growth rates and revenue may continue.
Turns out helping students find the right answers is the wrong business to be in on campuses where there’s literally no difference between right and wrong.
Related: TAL, EDU, STRAY, LRN, UDMY, GOOGL, ATGE, AFYA, GHC, LAUR, TWOU
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