Analyzing Lightspeed Commerce (NYSE:LSPD) & Chegg (NYSE:CHGG)

Chegg (NYSE:CHGG) and Lightspeed Commerce (NYSE:LSPD) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Valuation and Earnings

This table compares Chegg and Lightspeed Commerce”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chegg	$617.57 million	0.18	-$837.07 million	($0.72)	-1.38
Lightspeed Commerce	$1.08 billion	1.56	-$667.20 million	($4.55)	-2.72

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Chegg	-17.14%	-9.41%	-3.07%
Lightspeed Commerce	-59.16%	0.39%	0.36%

Analyst Ratings

This is a summary of current recommendations and price targets for Chegg and Lightspeed Commerce, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chegg	4	1	0	1	1.67
Lightspeed Commerce	2	11	5	1	2.26

Chegg currently has a consensus target price of $1.13, suggesting a potential upside of 12.95%. Lightspeed Commerce has a consensus target price of $13.72, suggesting a potential upside of 10.86%. Given Chegg’s higher probable upside, equities analysts plainly believe Chegg is more favorable than Lightspeed Commerce.

Institutional and Insider Ownership

95.2% of Chegg shares are owned by institutional investors. Comparatively, 68.7% of Lightspeed Commerce shares are owned by institutional investors. 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 is poised for long-term growth.

Volatility and Risk

Chegg has a beta of 1.99, suggesting that its stock price is 99% more volatile than the S&P 500. Comparatively, Lightspeed Commerce has a beta of 2.16, suggesting that its stock price is 116% more volatile than the S&P 500.

Summary

Lightspeed Commerce beats Chegg on 8 of the 14 factors compared between the two stocks.

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.

About Lightspeed Commerce

Lightspeed Commerce Inc. engages in sale of cloud-based software subscriptions and payments solutions for small and midsize businesses, retailers, restaurants, and golf course operators in North America, Europe, the United Kingdom, Australia, New Zealand, and internationally. Its Software as a Service platform enables customers to engage with consumers, manage operations, accept payments, etc. The company's cloud platforms are designed interrelated elements, such as omni-channel consumer experience, a comprehensive back-office operations management suite to improve customers' efficiency and insight, and the facilitation of payments. Its platform functionalities include full omni-channel capabilities, point of sale (POS), product and menu management, employee and inventory management, analytics and reporting, multi-location connectivity, order-ahead and curbside pickup functionality, loyalty, and customer management solutions. The company also offers tailored financial solutions, such as Lightspeed Retail, Lightspeed eCommerce, Lightspeed Restaurant, and Lightspeed B2B solutions. In addition, it sells hardware, including tablets, customer facing displays, receipt printers, networking hardware, cash drawers, payment terminals, servers, stands, bar-code scanners, and an assortment of accessories, as well as provides installation and implementation services. The company was formerly known as Lightspeed POS Inc. and changed its name to Lightspeed Commerce Inc. in August 2021. Lightspeed Commerce Inc. was incorporated in 2005 and is headquartered in Montreal, Canada.