Put Traders, Analysts Blast Sinking Chegg Stock

At least six firms have slashed their price targets on CHGG

Digital Content Manager
Feb 7, 2023 at 10:41 AM
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Chegg Inc (NYSE:CHGG) is down 21.1% to at $16.60 at last check, after the education tech name's 2023 net revenue forecast came in below estimates, while current-quarter revenue expectations missed the mark as well. This has the equity brushing off better-than-expected fourth-quarter earnings and revenue.

Analysts are already chiming in with bear notes. In fact, six firms have slashed their price targets on CHGG, with Piper Sandler lowering its objective to $17 from $23. The brokerage bunch already leans bearish, with nine of 14 firms in coverage rating the security a tepid "hold" or worse.

Options traders are blasting Chegg stock as well, with 4,540 calls and 6,197 puts across the tape so far, which is 16 times the volume that is typically seen at this point. The most popular contract is the February 17.50 call, followed by the 15 put in that monthly series, with new positions being opened at both.

This preference for bearish bets precedes the company's updates. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio of 2.27 sits higher than 86% of readings from the past year.  

Echoing this, CHGG's Schaeffer's put/call open interest ratio (SOIR) 1.54 sits higher than 96% of annual readings, indicating short-term options traders have rarely been more put biased.

Chegg stock is today trading at it lowest level since May, as it succumbs to overhead pressure at the $22 level and 200-day moving average. Year-over-year, CHGG is off 33.9%.


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