Short Sellers Watch Chegg Shares Race for Record High

Short sellers buying back their shares could be a tailwind for CHGG

Feb 12, 2019 at 9:13 AM
facebook twitter linkedin

The shares of education technology company Chegg Inc (NYSE:CHGG) are set to rally once again after earnings, after the firm's fourth-quarter financial update revealed better-than-expected earnings and revenue for the period. The company continued to add subscribers and raised its 2019 outlook, as well. A few bullish analyst notes have followed, pushing CHGG shares up 9.5% in pre-market trading -- a move that would put them in record-high territory at the open.

But starting with the analyst attention, no fewer than five firms have upped their views on Chegg, and the highest price target was set by Craig-Hallum at $45, raised from their previous mark of $34. There's room for an extended round of bull notes going forward, if you consider five of the nine brokerage firm covering the security have just "hold" ratings at the moment, and that the shares today could rise above the average 12-month price target of $37.40.

There's been a lot of activity from short sellers, too, who control 12.7% of the float. Going by the equity's average daily trading volumes, this accounts for 9.70 days' worth of buying power, suggesting there's plenty of short-covering potential for CHGG stock.

The security -- which has more than doubled year-over-year -- touched a record high of $36.05 one week back, benefiting from an impressive series of earnings wins over the past year and late-2018 support from its 50-week moving average.


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners