The company, which began trading publicly on Nov. 13, 2013, expects to post an adjusted EBIDTA loss of $10 million to $15 million for the full year, up from $4 million in 2013. It also expects gross margin to decrease to a range of 25% to 27% from 32% in 2013. Chegg also expects first-quarter revenue of $70 million to $72 million and full-year revenue of $310 million to $320 million, both of which align with the consensus estimates of $70 million and $313.3 million, respectively.
Chegg also struggled in the print textbook rental department, as sales rose only 3% year over year to $60.5 million in the fourth quarter. Revenue from digital products and services, though, soared 70% to $16.7 million. This accounted for 22% of total revenues in the quarter, compared to 14% in the same quarter in 2012.
Bank of America (BAC) downgraded Chegg to "neutral" from "buy" on Friday.
The stock closed at $6.17, down 22.29% or $1.27 from its previous close of $7.94. It had a volume of 3,977,756, well above its average of 748,892. The stock had a high of $7 for the day and holds a one-year high of $11.25.