Tech stocks have unexpectedly and suddenly fallen off a cliff during the last few trading days. For Chegg (NASDAQ:CHGG) stock, the selloff was quite sharp, with its shares shedding as much as 18%.

Don’t stress about this selloff of the tech sector or of CHGG stock.

The reality is that nothing is wrong with tech stocks besides the fact that they rallied too much. For months, these stocks could do no wrong. They kept pushing higher and higher and higher to more and more extreme valuations. Eventually, gravity kicked in, and the result is a rapid selloff of tech stocks to more reasonable valuation levels.

They’ll get to those more reasonable valuation levels soon. When they do, the selloff will end, and the longer-term rally will resume. That’s because the fundamentals underlying tech stocks remain as robust as ever.

That is, technology continues to disrupt every facet of our daily and professional lives at an accelerated pace because of Covid-19. Moreover, these companies’ influence, revenues and profits will only go way higher over the next five to ten years.

That is especially true for Chegg, a company that is defining a new era of connected, hybrid learning that will inevitably become adopted by most educational institutions around the world.

It also helps that, thanks to the recent selloff,  CHGG stock is now attractively undervalued.

So it’s time to buy Chegg’s shares on weakness.

Here’s a deeper look.

Defining a New Era of Learning

Chegg is on the cutting edge of  a new era of learning.

Make no mistake; we are entering a new era of learning.  Students will go back to school Indeed, many already are doing so. But digital technology will forever be a bigger and more important component of the learning process. With its chalkboards and physical textbooks. that process had become antiquated before the pandemic.

Going forward, learning will include e-textbooks, on-demand learning platforms, digital tools, virtual meetings and much more. This trend will likely be especially strong at the college level, where schools have more resources to invest in technology.

Chegg provides a market-leading, connected learning solution which is an optimal resource for students in this new world of hybridized, physical-and-digital learning. Through an on-demand, digital platform, Chegg helps students write essays, solve homework problems, get tutoring services, create citations, perform tricky math calculations and much more.

It’s an all-in-one, modern academic resource built for 21st century students. And in a post-Covid world, Chegg will proliferate among high school and college students who grew up in a world of on-demand, digital services.

Plus, Chegg recently acquired Thinkful, an on-demand, skills-based tutorial platform that teaches subscribers technical skills like coding. The adoption of this platform will also soar in a post-Covid world where hybrid work is the norm.

Compelling Long-Term Potential

By helping define a new era of hybridized learning, Chegg is optimally positioned to sustain huge growth over the next several years.

The platform has just 3.9 million subscribers today. There are 36 million high school and college students in the U.S. alone who could use Chegg’s services. There are another 18 million high school and college students in Canada, the U.K. and Australia. In non-core markets, like India, the Philippines, Mexico, South Korea, South Africa, and Japan, there are another 48 million college students.

In other words, Chegg has 3.9 million subscribers today, but its potential market amounts to 102 million subscribers.

And it’s not like those roughly 100 million students who are not using Chegg are subscribing to some other on-demand, connected learning platform.  Those students simply don’t subscribe to any on-demand, connected learning platforms.

Such platforms will become the global norm. As they do, Chegg will grow from 3.9 million subscribers today to tens of millions of subscribers over the next several years.

Chegg Stock Is Undervalued

On the heels of its recent selloff, Chegg’s shares are now attractively undervalued relative to the company’s long-term growth potential.

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

Factoring in continued declines in the textbook business, I see Chegg powering 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 drop. In America, Chegg hasn’t raised its marketing spending in five years.

Instead, the company has powered huge growth exclusively through the strength of its brand and word-of-mouth effects. The company’s higher average unit revenues will also boost its margins. Consequently, its adjusted operating margin should hit 40% by 2030.

Based on those assumptions, I estimate that Chegg’s annual earnings per share will increase from roughly $1 now 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 $67.50.

The Bottom Line

CHGG stock is a long-term winner that — because of  fears related to a tech stock bubble — has plunged into undervalued territory.

Buy the shares on weakness.Over the long-term, growing demand for next-generation digital education will push this stock way higher.

Luke Lango is a Markets Analyst for InvestorPlace. He has been professionally analyzing stocks for several years, previously working at various hedge funds and currently running his own investment fund in San Diego. A Caltech graduate, Luke has consistently been rated one of the world’s top stock pickers by various other analysts and platforms, and has developed a reputation for leveraging his technology background to identify growth stocks that deliver outstanding returns. Luke is also the founder of Fantastic, a social discovery company backed by an LA-based internet venture firm. As of this writing, he did not hold a position in any of the aforementioned securities.