Chegg shares drop 30% in after-hours trading.

 Chegg shares drop 30% in after-hours trading.

Chegg Shares Drop 30% in After-Hours Trading

Chegg, the online education company, saw its shares drop by 30% in after-hours trading on Tuesday, following the release of its second-quarter earnings report. The company reported a net loss of $5.4 million, or 5 cents per share, compared to a net income of $10.8 million, or 9 cents per share, in the same period last year.

The company’s revenue for the quarter was $153 million, up 10% from the same period last year, but below analysts’ expectations of $155.2 million. Chegg’s subscriber base also grew by 29% year-over-year to 4.8 million, but the company’s guidance for the third quarter was lower than expected.

Chegg CEO Dan Rosensweig said in a statement that the company’s results were impacted by the COVID-19 pandemic, which has caused disruptions in the education industry. “We are seeing a shift in the way students are learning, and we are adapting to meet their needs,” he said.

Despite the disappointing results, Rosensweig said that Chegg is still well-positioned for long-term growth. “We remain confident in our ability to execute on our strategy and deliver value to our shareholders,” he said.

Chegg’s stock has been on a rollercoaster ride this year, with shares surging to an all-time high of $116.24 in February before plummeting to a low of $25.89 in March. The stock has since recovered, but Tuesday’s after-hours drop erased most of those gains.

The education industry has been hit hard by the COVID-19 pandemic, with schools and universities around the world forced to close their doors and switch to online learning. Chegg, which provides online tutoring, textbook rentals, and other educational services, has seen increased demand as a result.

However, the pandemic has also caused economic uncertainty, which has led to budget cuts and reduced spending on education. Chegg’s lower-than-expected guidance for the third quarter reflects this uncertainty.

Despite the challenges, Chegg remains a leader in the online education space, with a strong brand and a loyal customer base. The company’s ability to adapt to changing market conditions will be key to its long-term success.