Analyzing Cengage Learning Holdings II (OTCMKTS:CNGO) and Chegg (NYSE:CHGG)

Cengage Learning Holdings II (OTCMKTS:CNGO) and Chegg (NYSE:CHGG) are both consumer defensive companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Insider and Institutional Ownership

97.2% of Chegg shares are held by institutional investors. 2.6% of Chegg shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Cengage Learning Holdings II and Chegg’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cengage Learning Holdings II	N/A	N/A	N/A
Chegg	1.41%	2.02%	0.98%

Valuation & Earnings

This table compares Cengage Learning Holdings II and Chegg’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cengage Learning Holdings II	N/A	N/A	N/A	N/A	N/A
Chegg	$733.50 million	1.65	$266.64 million	($0.24)	-43.58

Chegg has higher revenue and earnings than Cengage Learning Holdings II.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Cengage Learning Holdings II and Chegg, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cengage Learning Holdings II	0	0	0	0	N/A
Chegg	0	9	2	0	2.18

Chegg has a consensus target price of $14.91, indicating a potential upside of 42.53%. Given Chegg’s higher probable upside, analysts plainly believe Chegg is more favorable than Cengage Learning Holdings II.

Summary

Chegg beats Cengage Learning Holdings II on 8 of the 8 factors compared between the two stocks.

About Cengage Learning Holdings II

Cengage Learning Holdings II, Inc., together with its subsidiaries, operates as an education technology company worldwide. The company operates through three segments: Cengage Academic, Cengage Work, and Cengage Select. It offers eTextbooks; Cengage Unlimited, a subscription service for digital higher education materials; eTextbook subscription service; Cengage Infuse, an embedded course kit with a user experience for instructors; print textbooks, study guides, laboratory exercises, instructor editions, and supplemental products; and course and custom content development, and direct assistance to instructors and students for implementation and ongoing use of digital and print solutions. The company also provides various platforms, such as MindTap for as business and economics, social sciences, trades, and skills; WebAssign for mathematics and physics; Skills Assessment Manager for introductory computing; Cengage NOW for accounting; and Online Web-Based Learning for such as chemistry. In addition, it offers ed2go, an online learning platform; K-12, public, and academic libraries under the Gale brand, as well as licenses its proprietary and third-party content for integration with web-based information providers; English language curriculum and digital solutions under the NGL brand; educational resources for career-focused beauty and wellness education providers; and literacy materials to K-6 students under the Nelson brand. Further, the company Infosec, a cybersecurity education platform comprising Bootcamps, which provides instructor-led, digital course experiences for cybersecurity certifications or skill sets; Infosec Skills that offers training for reskilling and upskilling in the cybersecurity profession; and Infosec IQ, which offers security awareness training for non-technical learners to recognize, avoid, and report cyber-attacks and security incidents. The company was founded in 1903 and is headquartered in Boston, Massachusetts.

About Chegg

Chegg, Inc. operates direct-to-student learning platform that supports students starting with their academic journey and extending into their careers with products and services to support learner with their academic course materials. The company offers Chegg Services, which include subscription services; and skills and other, including skills, advertising services, print textbooks, and eTextbooks. Its subscription services include Chegg Study, which helps students master challenging concepts on their own; Chegg Writing that provides students with a suite of tools, such as plagiarism detection scans, grammar and writing fluency checking, expert personalized writing feedback, and premium citation generation; Chegg Math, a step-by-step math problem solver and calculator that helps students to solve problems; Chegg Study Pack, a bundle of various Chegg Services product offerings, including Chegg Study, Chegg Writing, and Chegg Math services, which creates an integrated platform of connected academic support services; and Busuu, an online language learning solution that offers a comprehensive solution through a combination of self-paced lessons, live classes with expert tutors, and the ability to learn and practice with members of the Busuu language learning community. The company also provides skills-based learning platform that offers professional courses along with networking, interviewing, and career services; and rents and sells print textbooks and eTextbooks. Chegg, Inc. was incorporated in 2005 and is headquartered in Santa Clara, California.