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 $120.8M against $82.2M — 1.5× the size. Chegg, Inc. has negative trailing earnings, so its P/E is not meaningful; Legacy Education Inc. trades at 13.9×. Legacy Education Inc. grew revenue faster over the last twelve months: 32.1% against −47.6%. Legacy Education Inc. has the higher net margin (10.9% vs −20.0%) and the higher return on invested capital (24.5% vs −75.1%). 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 13.90 11.19
P/S 0.31 1.53 0.92
P/B 0.69 2.41 1.63
Price to free cash flow n/m 25.11 9.62
EV/EBITDA 38.94 8.35 7.02
EV/Sales 0.27 1.26 0.82
Earnings yield (66.85%) 7.20% 3.17%
Free cash flow yield (8.56%) 3.98% 2.30%

Profitability

Metric CHGG LGCY Education & Training Services median
Gross margin 57.95% 47.24% 54.64%
Operating margin (20.94%) 14.36% 0.00%
Net margin (19.96%) 10.89% 3.29%
Free cash flow margin (2.62%) 6.10% 0.00%
Return on equity (38.34%) 19.11% 0.00%
Return on assets (16.77%) 11.91% 0.00%
Return on invested capital (75.06%) 24.48% 0.00%

Growth

Metric CHGG LGCY Education & Training Services median
Revenue growth (TTM) (47.59%) 32.10% 6.97%
EPS growth (last fiscal year) 88.15% 11.32% —
Revenue growth, 5-year CAGR (10.17%) — 4.27%
Net income growth, 5-year CAGR 0.00% — 0.00%

Health

Metric CHGG LGCY Education & Training Services median
Debt to equity 0.00 0.01 0.08
Current ratio 1.17 3.36 1.33
Net debt to EBITDA 1.93 (1.80) (0.15)

Dividend

Metric CHGG LGCY Education & Training Services median
Dividend yield — — 1.13%
Payout ratio 0.00 — 0.00

Size

Metric CHGG LGCY Education & Training Services median
Market cap 82.16m 120.81m 68.93m

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