LegalZoom (LZ – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Ella Smith from J.P. Morgan maintained a Buy rating on the stock and has a $11.00 price target.
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Ella Smith’s rating is based on LegalZoom’s recent strategic moves and financial performance. The acquisition of Formation Nation has expanded LegalZoom’s offerings, particularly in small business subscription solutions, which is expected to enhance its market position. Alongside this, LegalZoom’s preliminary fourth-quarter results for 2024 have been promising, with adjusted EBITDA at the high end of guidance and free cash flow significantly exceeding expectations.
Additionally, under the leadership of CEO Jeff Stibel, LegalZoom has seen a notable improvement in EBITDA margins. These factors, combined with a positive outlook for future earnings and cash flow, have led to an increase in the price target to $11 per share. LegalZoom’s ability to generate substantial cash flow and its valuation based on profitability rather than revenue growth underpin the confidence in its stock performance, justifying the Buy rating.