As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q4. Today, we are looking at consumer subscription stocks, starting with Chegg (NYSE:CHGG).
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
The 8 consumer subscription stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 27.8% since the latest earnings results.
Chegg (NYSE:CHGG)
Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.
Chegg reported revenues of $143.5 million, down 23.7% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a decline in its users and a significant miss of analysts’ number of services subscribers estimates.
"We made two important and connected decisions to maximize the future of our business and shareholder value. We are launching a strategic review process and filed a complaint against Google, which has unjustly retained traffic that has historically come to Chegg, impacting our acquisitions, revenue and employees,” said Nathan Schultz, CEO of Chegg.
Chegg delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The company reported 3.64 million users, down 20.5% year on year. Unsurprisingly, the stock is down 69.2% since reporting and currently trades at $0.49.
With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ:UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.
Udemy reported revenues of $199.9 million, up 5.5% year on year, outperforming analysts’ expectations by 2.7%. The business had a strong quarter with EBITDA guidance for next quarter exceeding analysts’ expectations.
The stock is down 19.3% since reporting. It currently trades at $6.31.
Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ:MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.
Match Group reported revenues of $860.2 million, flat year on year, in line with analysts’ expectations. It was a softer quarter as it posted a decline in its users.
Match Group delivered the weakest full-year guidance update in the group. The company reported 14.61 million users, down 3.8% year on year. As expected, the stock is down 21.7% since the results and currently trades at $28.52.
Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ:BMBL) is a leading dating app built with women at the center.
Bumble reported revenues of $261.6 million, down 4.4% year on year. This print met analysts’ expectations. More broadly, it was a slower quarter as it produced EBITDA guidance for next quarter missing analysts’ expectations.
The company reported 4.18 million active buyers, up 5.3% year on year. The stock is down 50.6% since reporting and currently trades at $4.
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.
Duolingo reported revenues of $209.6 million, up 38.8% year on year. This result topped analysts’ expectations by 2.1%. Zooming out, it was a slower quarter as it recorded EBITDA guidance for next quarter missing analysts’ expectations.
Duolingo scored the fastest revenue growth among its peers. The company reported 116.7 million users, up 32% year on year. The stock is down 10.5% since reporting and currently trades at $334.99.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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