William Blair analyst Stephen Sheldon has reiterated their neutral stance on LZ stock, giving a Hold rating today.
Confident Investing Starts Here:
- Quickly and easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter
Stephen Sheldon has given his Hold rating due to a combination of factors that reflect both positive and challenging aspects of LegalZoom’s recent performance. The company reported strong first-quarter results with revenue and adjusted EBITDA surpassing estimates, while free cash flow was significantly higher than expected. However, the adjusted EPS slightly missed expectations, aligning with consensus.
Despite reiterating its 2025 guidance, LegalZoom anticipates a decline in macro-level formations, which could impact future growth. While subscription revenue showed impressive acceleration, driven by improved bundling strategies, there are concerns about lower renewal rates from the initial bundled cohort. Additionally, the discontinuation of certain services and strategies has created headwinds for growth, affecting average revenue per user. These mixed signals contribute to the Hold rating, as the company navigates both opportunities and challenges in its business model.
In another report released today, Barclays also maintained a Hold rating on the stock with a $9.00 price target.