Comparing GitLab (NASDAQ:GTLB) & Chegg (NYSE:CHGG)

GitLab (NASDAQ:GTLB) and Chegg (NYSE:CHGG) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.

Volatility & Risk

GitLab has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, Chegg has a beta of 1.85, meaning that its share price is 85% more volatile than the S&P 500.

Profitability

This table compares GitLab and Chegg’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GitLab	-0.55%	-2.71%	-1.63%
Chegg	-53.67%	-12.31%	-3.27%

Institutional & Insider Ownership

95.0% of GitLab shares are owned by institutional investors. Comparatively, 95.2% of Chegg shares are owned by institutional investors. 16.4% of GitLab shares are owned by insiders. Comparatively, 3.7% of Chegg shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares GitLab and Chegg”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GitLab	$759.25 million	10.94	-$6.33 million	($0.04)	-1,257.50
Chegg	$617.57 million	0.27	-$837.07 million	($2.61)	-0.59

GitLab has higher revenue and earnings than Chegg. GitLab is trading at a lower price-to-earnings ratio than Chegg, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for GitLab and Chegg, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GitLab	0	6	20	1	2.81
Chegg	3	4	0	1	1.88

GitLab presently has a consensus price target of $58.88, indicating a potential upside of 17.05%. Chegg has a consensus price target of $1.70, indicating a potential upside of 10.75%. Given GitLab’s stronger consensus rating and higher possible upside, equities analysts plainly believe GitLab is more favorable than Chegg.

Summary

GitLab beats Chegg on 11 of the 14 factors compared between the two stocks.

About GitLab

GitLab Inc., through its subsidiaries, develops software for the software development lifecycle in the United States, Europe, and the Asia Pacific. It offers GitLab, a DevOps platform, which is a single application that leads to faster cycle time and allows visibility throughout and control over various stages of the DevOps lifecycle. The company helps organizations to plan, build, secure, and deploy software to drive business outcomes. It also provides related training and professional services. The company was formerly known as GitLab B.V. and changed its name to GitLab Inc. in July 2015. GitLab Inc. was founded in 2011 and is headquartered in San Francisco, California.

About Chegg

Chegg, Inc. operates a direct-to-student learning platform that helps learners build essential life and job skills to accelerate their path from learning programs in the United States and internationally. Its subscription services include Chegg Study, which offers personalized step-by-step learning support from AI, computational engines, and subject matter experts, as well as Tinger Gold and DashPash Student services; Chegg Writing that provides students with a suite of tools, such as plagiarism detection scans, grammar and writing fluency checking, expert personalized writing feedback, and premium citation generation; Chegg Math, a step-by-step math problem solver and calculator that helps students to solve problems; Chegg Study Pack, a bundle of various subscription product offerings, including Chegg Study, Chegg Writing, and Chegg Math services; and Busuu, an online language learning platform that offers comprehensive support through self-paced lessons, live classes with expert tutors, and a community of members to practice alongside. The company also provides a skills-based learning platform to learn technical skills comprising AI, coding, data analytics, and cybersecurity, as well as competencies consisting of emotional intelligence, mindset, emerging leadership, and decision making. In addition, it rents and sells print textbooks and eTextbooks; and offers advertising services. The company serves students and companies through direct marketing channels and social media. Chegg, Inc. was incorporated in 2005 and is headquartered in Santa Clara, California.