Can Chegg Turn Its Skilling Pivot Into a True 2026 Comeback?

Chegg, Inc. CHGG has redefined its business model with a new growth engine, Chegg Skilling, built by integrating Busuu and Chegg Skills. The cornerstone of this reinvention is its belief in the massive and rapidly expanding global skilling market, which is now estimated at more than $40 billion, to offer scale, stability and long-term relevance that traditional study support can no longer guarantee.

Busuu is a language learning platform that offers AI-enhanced conversational tools, while Chegg Skills targets frontline workers and job-oriented upskilling, especially in AI skills, which are in exceptionally high demand. Together, these units already exhibit double-digit growth, with Chegg expecting the segment to finish 2025 with 14% year-over-year momentum and reach $70 million in annual revenues. Besides, CHGG’s B2B focus, anchored by successful channels such as Guild, positions it to win contracts from employers seeking scalable training solutions. Moreover, future expansion into Latin America and new distribution partnerships are already underway concerning this aspect.

Critically, Chegg’s sweeping cost restructure gives this pivot financial credibility. The company plans to reduce non-GAAP expenses from $536 million in 2024 to under $250 million by 2026, while also cutting capital expenditures by roughly 60% next year. Improved operational discipline helped the company beat adjusted EBITDA expectations in the third quarter of 2025, signaling that the leaner model is beginning to deliver results.

Whether CHGG can convert this momentum into a full-scale 2026 comeback depends on sustained double-digit skilling growth, successful channel diversification and steady cash generation from the legacy business. But for the first time in several years, the company appears aligned around a clear, growing market and optimistic about its ability to lead within it.

Chegg vs Other Market Players

Chegg operates in a highly competitive landscape, with renowned names like Duolingo, Inc. DUOL and Udemy, Inc. UDMY operating beside it in the ed tech market.

Duolingo dominates the language-learning niche with its gamified app and AI-driven engagement. With a strong mobile presence and daily user engagement, Duolingo has built a brand synonymous with accessible, bite-sized learning. On the other hand, Udemy continues to scale its vast marketplace model, leveraging thousands of independent instructors to address fast-changing professional and technical learning needs.

Chegg’s challenge is proving that its B2B skilling pivot can deliver durable growth, while Udemy continues expanding its corporate footprint and Duolingo deepens monetization through subscriptions and new product lines. Ultimately, Chegg, Udemy, and Duolingo illustrate three divergent approaches to competing in an ed-tech market reshaped by AI, corporate upskilling demand and the need for measurable learning outcomes.

CHGG Stock’s Price Performance & Valuation Trend

Shares of this California-based education technology company have sunk 22.6% in the past month, underperforming the Zacks Internet - Software industry, the Zacks Computer and Technology sector and the S&P 500 Index.

CHGG stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 0.35, as evidenced by the chart below. The discounted valuation of the stock, compared with its peers, advocates for an attractive entry point for investors.

Earnings Estimate Trend of CHGG

The Zacks Consensus Estimate for 2025 loss has widened in the past 30 days to 14 cents, while earnings estimates for 2026 have moved up to 18 cents during the same time frame.

While the estimated figure for 2025 indicates a decline of 118.7% year over year, estimates for 2026 indicate 228.6% growth.

Chegg stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research