Suppose you've got $100 that you don't need at the moment for life's necessities or to pad out your retirement or emergency savings funds. Putting that Benjamin Franklin-covered currency to work investing in the stock market may be a good option. Which stock to put that $100 towards then becomes the question. 

One stock to consider is education technology company Chegg (NYSE:CHGG). It has a massive collection of proprietary content and a profitable business model, and it is currently selling at a substantially lower price than it was just last week. Let's find out a bit more about this company, its stock, and why you can buy it cheap at the moment.

A student doing his homework in the library.

Image source: Getty Images.

Content is king 

Chegg generates most of its revenue by selling subscriptions to students that give those students access to content that can help with their coursework. The content students pay for is mostly step-by-step solutions to problems they likely face as part of their classes, all available in a keyword-searchable database. In all, Chegg has 70 million pieces of this kind of material, attracting millions of students to sign up for access.

What makes this content even more valuable is that much of it is created at students' request. In addition to accessing content, subscribers can ask up to 20 questions per month about the content they see that gets answered by Chegg's subject-matter experts. These questions and answers then become available for all subscribers to see. That makes the content highly relevant because it is precisely what students want -- literally. 

These added content solutions tend to remain relevant for a long time because college courses don't change all that much from year to year. You will always need to learn to solve derivatives in calculus, read financial statements in finance, and grapple with supply and demand curves in economics. And courses like these are mostly the same in the U.S. and other countries. 

Chegg is built for scale 

Chegg's business model is built on a foundation that can scale efficiently. Spending on new content is driven by subscribers and is exactly what its customers want, so it does not risk producing wasteful content. Furthermore, Chegg spends money once for creating a piece of content, and it can use that content for several years to serve multiple new waves of subscribers. 

Chegg's operating profit margin chart.

Data by Ycharts.

That can partly explain why Chegg's operating profit margin expanded rapidly in the last five years (see chart above). The trend is likely to continue higher as it reaches a larger scale in content and subscribers. Students typically only ask questions to subject-matter experts on topics Chegg does not already have. Therefore, as it adds more content, there will be less need to pay experts for the new solutions. Moreover, beyond answering questions, Chegg does not pay much more to serve 20 million subscribers than it would to serve 15 million. 

Chegg stock is trading at a deep discount 

Chegg announced fiscal 2021 third-quarter earnings on Nov. 1 that greatly disappointed investors. The company revealed that enrollment at community colleges and universities is way down in the fall semester. As schools tried to bring students back to campus and transition away from remote learning, students did not want to come back. Management anticipates this trend to have a substantial and negative impact on its business in the short term. The stock price crashed almost 50% in response to the news.

The discount means investors can now buy Chegg stock at a very favorable price-to-free-cash-flow of 29, the lowest it has sold for in at least five years. The company has a competitive advantage with its proprietary content and an efficiently scalable business model. Plus, decreasing college enrollment -- the reason the price is down -- is likely to be temporary. For those reasons, Chegg stock just might be an excellent place to invest $100 right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.