15 Worst 52-Week Low Stocks to Buy Now According to Short Sellers

6. Chegg, Inc. (NYSE:CHGG)

52 Week Range: $1.72 – $11.48

Current Share Price: $1.84

Short % of Shares Outstanding:13.46%

Number of Hedge Funds holding stakes as of Q2 2024: 24

Chegg, Inc. (NYSE:CHGG) is a company that develops learning platforms that help people build essential life and job skills. Subscription services include Chegg Study, which offers personalized step-by-step learning support from A.I., computational engines, and subject matter experts, as well as Tinger Gold

Chegg, Inc. (NYSE:CHGG) was one of the companies that benefited from the COVID-19 pandemic, which forced most people to stay home and resort to online learning services. With normalcy returning and students returning to classes, its services are no longer in high demand, as was the case at the height of the pandemic.

Chegg, Inc. (NYSE:CHGG)’s core business has been under pressure, with the subscriber count of its services dropping to 4.4 million in the second quarter. The decline is attributed to industry pressure and competitive dynamics. Given that most weaknesses appear secular, they might persist as Chegg struggles to make substantial investments in product enhancements due to margin discipline.

The company’s revenue has dropped in nine consecutive quarters, underlying weakness in the core business and weak demand for its services. Its revenue in the second quarter was down by 11% to $163.1 million as subscription revenues dropped 11% to $146.8 million. Consequently, the company ended up posting a net loss of 4616.9 million

Management issuing a subdued outlook for the third quarter affirms why Chegg, Inc. (NYSE:CHGG) could be one of the worst 52-week low stocks to buy now, according to short sellers, given the lack of catalysts to push the stock up after the recent implosion to 52-week lows. Uncertainty over the company’s long-term prospects is why short interest in the stock remains at a high of 13.46%.

According to Insider Monkey’s second-quarter database, 24 hedge funds were bullish on Chegg, Inc. (NYSE:CHGG), the same as in the prior quarter. D E Shaw is a prominent stakeholder of the company, with 4.8 million shares worth $65.11 million.