Chegg (NYSE:CHGG – Get Free Report) and Frontdoor (NASDAQ:FTDR – Get Free Report) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.
Risk & Volatility
Chegg has a beta of 2.26, suggesting that its stock price is 126% more volatile than the S&P 500. Comparatively, Frontdoor has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500.
Valuation & Earnings
This table compares Chegg and Frontdoor”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Chegg | $234.24 million | 0.29 | -$103.42 million | ($0.37) | -1.68 |
| Frontdoor | $2.09 billion | 3.15 | $255.00 million | $4.00 | 24.35 |
Frontdoor has higher revenue and earnings than Chegg. Chegg is trading at a lower price-to-earnings ratio than Frontdoor, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Chegg and Frontdoor, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Chegg | 1 | 2 | 0 | 0 | 1.67 |
| Frontdoor | 0 | 2 | 5 | 0 | 2.71 |
Frontdoor has a consensus price target of $99.80, indicating a potential upside of 2.47%. Given Frontdoor’s stronger consensus rating and higher possible upside, analysts clearly believe Frontdoor is more favorable than Chegg.
Institutional & Insider Ownership
95.2% of Chegg shares are owned by institutional investors. 3.0% of Chegg shares are owned by company insiders. Comparatively, 1.6% of Frontdoor shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Profitability
This table compares Chegg and Frontdoor’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% |
| Frontdoor | 12.96% | 124.74% | 15.33% |
Summary
Frontdoor beats Chegg on 11 of the 14 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 Frontdoor
Frontdoor, Inc. provides home service plans and repair solutions in the United States. Its plans help homeowners manage the cost of repairing or replacing covered home systems and appliances, such as heating and cooling equipment, plumbing, and kitchen appliances. The company serves customers through brands including American Home Shield, HSA Home Warranty, and OneGuard Home Warranties. It also connects customers with a network of independent service contractors and offers digital tools and support to help arrange home repairs.
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