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Chegg, Inc. (CHGG) vs Legacy Education Inc. (LGCY)

Chegg, Inc. and Legacy Education Inc. are both Education & Training Services companies. Legacy Education Inc. is the larger, with a market value of $112.9M against $66.5M — 1.7× the size. Chegg, Inc. has negative trailing earnings, so its P/E is not meaningful; Legacy Education Inc. trades at 12.1×. Legacy Education Inc. grew revenue faster over the last twelve months: 24.8% against −47.7%. Legacy Education Inc. has the higher net margin (11.4% vs −17.2%) and the higher return on invested capital (24.4% vs −37.8%). Across the 18 metrics below, Legacy Education Inc. leads on 12 and Chegg, Inc. on 6.

Valuation

Metric CHGG LGCY Education & Training Services median
P/E n/m 12.12 12.09
P/S 0.28 1.39 0.80
P/B 0.58 2.11 1.39
Price to free cash flow n/m 41.59 7.31
EV/EBITDA 7.85 7.15 6.36
EV/Sales 0.37 1.11 0.58
Earnings yield (61.70%) 8.25% 3.29%
Free cash flow yield (0.77%) 2.40% 3.03%

Profitability

Metric CHGG LGCY Education & Training Services median
Gross margin 56.38% 46.39% 55.03%
Operating margin (18.61%) 14.75% 0.00%
Net margin (17.17%) 11.42% 1.77%
Free cash flow margin (0.22%) 3.35% 0.00%
Return on equity (30.74%) 19.49% 0.00%
Return on assets (14.20%) 12.37% 0.00%
Return on invested capital (37.84%) 24.41% 0.00%

Growth

Metric CHGG LGCY Education & Training Services median
Revenue growth (TTM) (47.68%) 24.76% 5.84%
EPS growth (last fiscal year) 88.15% 11.86% 14.71%
Revenue growth, 5-year CAGR (10.17%) — 4.24%
Net income growth, 5-year CAGR 0.00% — 0.00%

Health

Metric CHGG LGCY Education & Training Services median
Debt to equity 0.00 0.00 0.05
Current ratio 1.35 3.70 1.37
Net debt to EBITDA 1.93 (1.81) (0.04)

Dividend

Metric CHGG LGCY Education & Training Services median
Dividend yield — — 2.64%
Payout ratio — — 0.26

Size

Metric CHGG LGCY Education & Training Services median
Market cap 66.53m 112.91m 59.54m

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