Chegg‘s (NASDAQ:CHGG) second-quarter earnings report, delivered on Monday, confirmed two simple realities. One, Chegg is increasingly transforming into a ubiquitous, on-demand learning platform for students across the globe. That transformation will continue regardless of what education looks like in the future. Secondly, because of point one, CHGG stock is a long-term winner.

Yet the shares dropped slightly after the print. The weakness of CHGG stock is definitely a buying opportunity.

Chegg has been red-hot, as its shares are up 125% this year and trade at all-time highs. The recent decline was caused by profit-taking after the stock’s big rally.

This profit-taking dynamic will end soon. When it does, fundamentals will drive CHGG stock higher over the next six months and over the next five to ten years. That’s because Chegg will be a long-term winner.

So buy Chegg on weakness, weather the near-term storm,  and hold it for the long-haul.

Chegg’s Strong Earnings Report

Chegg’s second-quarter earnings report was outstanding.

It beat across the board, smashing average revenue and profit estimates. Chegg’s subscriber base rose 67% year-over-year to 3.7 million, versus its trailing four-quarter average subscriber growth rate of 31%.  Amid widespread school closures, students are flocking to Chegg’s on-demand, connected learning platform.

Importantly, this flocking happened all across the globe at roughly equal rates. Students in the U.S. and around the world swarmed to Chegg in Q2.

Boosted by significant user growth, revenues rose 63% year-over-year in the quarter. Chegg’s large size increased its profitability, and its operating margins expanded by four percentage points. As a result, its operating profits rose nearly 90%.

Importantly, this rapid growth is expected to continue into the second half of 2020, even as students go back to school.

Chegg says that, regardless of what type of learning environment students will return to, they will continue to utilize Chegg.

Consequently, management said that the company’s subscriber growth will remain robust for the next six months, despite limited visibility into what education will look like in December. Chegg predicted that its revenues would rise 45%-plus in both Q3 and Q4.

Chegg’s Q2 earnings report was a home run, and the company broadly confirmed that, indeed, student uptake of its digital learning platforms is soaring right now and will continue to soar for the foreseeable future.

Non-Cyclical Growth Drivers

Chegg is supported by multiple, non-cyclical growth drivers which are transforming this company’s connected platform into a ubiquitous learning tool for students all across the globe.

First, where students learn is being redefined, and they are now using more digital tools than ever.

Students will eventually return to high school and college campuses. But when they do return, online learning will be a bigger part of their curriculum in their classrooms, both because students are demanding that digital tools be incorporated more fully and because institutions are getting better at delivering and using them.

Thus, the digitization of learning is a non-cyclical trend which facilitates the ubiquitous adoption of digital learning platforms like Chegg.

Secondly, outside of school, students will increasingly turn towards on-demand, connected learning platforms for more consistent, always-on learning help. Those platforms will provide services like on-demand tutoring, step-by-step solutions, interactive chat, etc.

Thus, rising adoption of on-demand learning tools is another non-cyclical trend which will result in the ubiquitous adoption of platforms like Chegg.

Third, what students learn is changing. The K-12 curriculum isn’t going to get flipped on its head. But students are increasingly looking to learn skills, like coding and data analysis, that will help them get jobs during the recession  Chegg’s Thinkful system helps them acquire such skills.

Thus, the expansion of skill-based, online learning platforms is a non-cyclical trend which spurs ubiquitous adoption of Chegg-owned businesses like Thinkful.

Chegg Stock Is a Winner

Given that Chegg’s connected learning ecosystem is on the cusp of going from niche (3.7 million global subscribers) to ubiquitous (102 million total potential global subscribers), it’s easy to see that this company has huge growth potential over the next five to ten years.

That huge growth potential will make CHGG stock a long-term winner.

Here’s the math.

Chegg will leverage virtualization tailwinds, international expansion and its increasing value to grow its subscribers at a 20%-plus compounded annual rate. As a result, it will have 30-plus million subscribers by 2030. Thanks to Thinkful (whose courses cost several thousand dollars each), its average revenue per subscriber will rise at a steady, low-single-digit percentage pace into 2030.

High subscriber growth, low per-subscriber revenue growth. and  slight declines in the required materials business should power 20%-plus compounded annual revenue growth into 2030.

Chegg’s profit margins will expand because, as the company grows its international business, its marketing spending as a percentage of revenue will moderate. In America, Chegg hasn’t raised its marketing spending in five years. Instead, it’s powered huge growth exclusively through the strength of its brand  and word-of-mouth. The company’s higher average unit revenues will also boost its margins. Its adjusted operating margin should hit 40% by 2030.

Based on those assumptions, I see Chegg growing its earnings per share from roughly $1 to $11 by 2030.

Based on a forward price-earnings ratio of 20 times, which is average for the interactive-media sector, my 2029 price target for CHGG stock is $220, versus its price this morning of around $85.

The Bottom Line on CHGG Stock

Chegg’s earnings underscored a simple reality. Specifically, this company’s niche connected learning platform is clearly poised to proliferate around the world over the next five to ten years.

As Chegg goes from niche today to widespread tomorrow, the company will sustain robust subscriber, revenue and profit growth. That robust growth will power continued strong gains in CHGG stock.