A Look Back at Consumer Subscription Stocks' Q4 Earnings: Chegg (NYSE:CHGG) Vs The Rest Of The Pack

As the Q4 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the consumer subscription industry, including Chegg (NYSE:CHGG) and its peers.

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 7 consumer subscription stocks we track reported a satisfactory Q4. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 3.4% on average 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 $72.66 million, down 49.4% year on year. This print exceeded analysts’ expectations by 2.3%. Overall, it was a strong quarter for the company with EBITDA guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

Chegg delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 14.1% since reporting and currently trades at $0.64.

Is now the time to buy Chegg? Access our full analysis of the earnings results here, it’s free.

Best Q4: Roku (NASDAQ:ROKU)

With a name meaning six in Japanese because it was the founder's sixth company that he started, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.

Roku reported revenues of $1.39 billion, up 16.1% year on year, outperforming analysts’ expectations by 3%. The business had an exceptional quarter with EBITDA guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

Roku pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 18.5% since reporting. It currently trades at $98.28.

Is now the time to buy Roku? Access our full analysis of the earnings results here, it’s free.

Weakest Q4: Duolingo (NASDAQ:DUOL)

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 $282.9 million, up 35% year on year, exceeding analysts’ expectations by 2.5%. Still, it was a softer quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and full-year EBITDA guidance missing analysts’ expectations significantly.

As expected, the stock is down 13.4% since the results and currently trades at $101.77.

Read our full analysis of Duolingo’s results here.

Netflix (NASDAQ:NFLX)

Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.

Netflix reported revenues of $12.05 billion, up 17.6% year on year. This number topped analysts’ expectations by 0.7%. Zooming out, it was a slower quarter as it produced EPS guidance for next quarter missing analysts’ expectations significantly and revenue guidance for next quarter meeting analysts’ expectations.

Netflix scored the highest full-year guidance raise among its peers. The stock is up 13.7% since reporting and currently trades at $99.26.

Read our full, actionable report on Netflix here, it’s free.

Match Group (NASDAQ:MTCH)

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 $878 million, up 2.1% year on year. This result surpassed analysts’ expectations by 0.7%. Aside from that, it was a mixed quarter as it also recorded EBITDA guidance for next quarter exceeding analysts’ expectations but full-year revenue guidance missing analysts’ expectations significantly.

Match Group had the weakest full-year guidance update among its peers. The company reported 13.84 million users, down 5.2% year on year. The stock is up 8.8% since reporting and currently trades at $31.43.

Read our full, actionable report on Match Group here, it’s free.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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