LONDON - Language learning provider Busuu, now a Chegg (NYSE:CHGG) service, has launched a new AI-powered feature called 'speaking practice', designed to aid learners in improving their conversational skills. The feature offers an immersive experience with videos of native speakers and personalized feedback on pronunciation, aiming to build learner confidence in speaking another language.
The 'speaking practice' tool uses AI to assess learners' speech and provide instant feedback, highlighting areas for improvement. This feature is in response to a survey finding that 55% of language learners prioritize conversational skills, and 66% prefer 'listen & repeat' exercises.
Busuu's 'speaking practice' is integrated into its comprehensive language courses, which cover listening, reading, writing, and speaking. This scaffolding ensures that learners have a grasp of grammar and vocabulary before they practice speaking.
Currently, the feature supports English, Spanish, French, and German, and is available across all 16 interface languages provided by Busuu. While all learners can access two speaking lessons for free, unlimited access is granted to Premium subscribers.
The service is accessible via the Apple (NASDAQ:AAPL) App Store, with plans to expand to Android and a web version later in the year. Busuu, acquired by Chegg in January 2022 for €385 million, aims to empower people through languages with its platform that combines lessons and native-speaker content.
This information is based on a press release statement.
In other recent news, Chegg has announced a five-year agreement with Amazon (NASDAQ:AMZN) Web Services (AWS) to bolster its AI learning tools. The partnership aims to enhance personalized learning experiences for students globally using AWS technologies. Chegg also revealed a significant restructuring plan, including a 23% reduction in its workforce, projected to result in annual cost savings of $40 million to $50 million by 2025. This move follows a 7% year-over-year decline in revenue for Q1 2024, with earnings reported at $174 million.
Analysts' outlooks on Chegg have been adjusted in light of these developments. BMO Capital Markets maintained an Outperform rating, while Piper Sandler and Jefferies kept an Underweight rating. Needham also reiterated a Hold rating, expressing caution regarding Chegg's near-term prospects.
In addition to these changes, Chegg is undergoing a leadership transition, with the current CEO moving to the Executive Chairman role and the Chief Operating Officer set to assume the CEO position.
InvestingPro Insights
As Busuu launches its innovative 'speaking practice' feature under the Chegg umbrella, investors and users alike may be curious about the financial health and market position of Chegg (CHGG). Here are some insights from InvestingPro that shed light on the company's current status:
InvestingPro Data indicates that Chegg has a market capitalization of $304.61 million, which reflects its value in the eyes of investors. Despite recent challenges, the company maintains impressive gross profit margins of 73.68% for the last twelve months as of Q1 2024. This suggests that while revenue has seen a decline of 6.54% during the same period, Chegg's ability to control costs and maintain profitability on its services remains strong.
From a valuation perspective, Chegg's Price / Book ratio stands at a low 0.31, hinting at a potential undervaluation of the company's assets relative to its market price. This could be of interest to value investors looking for opportunities where the market has not fully recognized a company's asset value.
InvestingPro Tips highlight that analysts are optimistic about Chegg's net income growth this year. This is a positive sign for potential investors, as it suggests expectations of improved financial performance. Additionally, the Relative Strength Index (RSI) suggests that the stock is currently in oversold territory, which might attract traders looking for a rebound.
For readers interested in a deeper dive into Chegg's financials and future prospects, InvestingPro offers additional tips and metrics. There are currently 14 more InvestingPro Tips available for Chegg, providing a comprehensive analysis of the company's stock performance and predictions. Users can access these insights and more by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at https://www.investing.com/pro/CHGG.
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