Head to Head Review: Chegg (NYSE:CHGG) vs. American Public Education (NASDAQ:APEI)

Chegg (NYSE:CHGG) and American Public Education (NASDAQ:APEI) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.

Institutional & Insider Ownership

95.2% of Chegg shares are held by institutional investors. Comparatively, 79.6% of American Public Education shares are held by institutional investors. 3.0% of Chegg shares are held by company insiders. Comparatively, 10.6% of American Public Education shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Chegg and American Public Education’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chegg	-17.17%	-16.11%	-8.16%
American Public Education	6.83%	14.99%	8.58%

Volatility and Risk

Chegg has a beta of 2.26, indicating that its stock price is 126% more volatile than the S&P 500. Comparatively, American Public Education has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Chegg and American Public Education, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chegg	1	2	0	0	1.67
American Public Education	0	3	3	1	2.71

American Public Education has a consensus price target of $57.62, suggesting a potential upside of 40.00%. Given American Public Education’s stronger consensus rating and higher probable upside, analysts plainly believe American Public Education is more favorable than Chegg.

Earnings & Valuation

This table compares Chegg and American Public Education”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chegg	$376.91 million	0.17	-$103.42 million	($0.37)	-1.58
American Public Education	$648.86 million	1.15	$31.56 million	$2.45	16.80

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

Summary

American Public Education beats Chegg on 13 of the 15 factors compared between the two stocks.

About Chegg

Chegg, Inc. is an education technology company that provides digital learning tools and academic support services to students. Its platform offers study assistance, expert answers, practice materials, writing support, and other resources intended to help students understand course content and complete academic work. The company’s products have included Chegg Study, Chegg Writing, and Mathway, a mobile mathematics problem-solving service. Chegg has also offered language-learning services through Busuu, which it acquired in 2022.

About American Public Education

American Public Education, Inc. (APEI) is a provider of higher education through a portfolio of institutions that includes American Public University System, Rasmussen University and Hondros College of Nursing. Its offerings span online and campus-based programs in areas such as nursing and health care, business, technology, education and public service. American Public University System includes American Military University and American Public University. Founded in 1991 as American Military University, it delivers online programs to military-affiliated students, public-service professionals and other learners in the United States and abroad.