LegalZoom (LZ) AI Stock Analysis

• Market Cap: $1.66B
• Dividend Yield: N/A
• Average Volume (3M): 2.27M
• Price to Earnings (P/E): 75.1
• Beta (1Y): 1.06
• Revenue Growth: 7.17%
• EPS Growth: -5.86%
• Country: US
• Employees: 964
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 0.17
• Shares Outstanding: 177,270,260
• 10 Day Avg. Volume: 2,168,249
• 30 Day Avg. Volume: 2,266,689
• PEG Ratio: 0.34
• Price to Book (P/B): 14.51
• Price to Sales (P/S): 1.98
• P/FCF Ratio: 13.54
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 2.36
• Enterprise Value/Gross Profit: 3.59
• Enterprise Value/Ebitda: 22.54
• 1Y Price Target: $12.25
• Price Target Upside: 31.58% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 0.64
• Revenue Forecast (FY): $748.89M

• Rating: 66 Neutral
• Price Target: $9.50 ▲(2.04% Upside)

LegalZoom's overall stock score is driven by strong financial performance and positive earnings call insights, which highlight growth and strategic advancements. However, technical analysis indicates bearish momentum, and the high P/E ratio suggests potential overvaluation. The absence of corporate events and dividend yield further tempers the score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion and stability.

Subscription Model Success

The growing subscription base enhances recurring revenue streams, providing financial predictability and supporting sustained business growth.

Strategic Partnerships

Partnerships with AI pioneers enhance product offerings and customer acquisition, strengthening competitive positioning and innovation capacity.

Negative Factors

Decreased Retention Rates

Declining retention rates may indicate customer dissatisfaction or competitive pressures, potentially impacting long-term revenue stability.

ARPU Decline

A decline in ARPU suggests pressure on pricing power and profitability, which could affect long-term financial performance if not addressed.

Seasonality Concerns

Seasonal revenue fluctuations can lead to inconsistent cash flows, complicating financial planning and potentially affecting quarterly performance.

LegalZoom Business Overview & Revenue Model

Company Description

LegalZoom is a leading online legal services provider that offers a range of services to individuals and small businesses. Founded in 2001, the company operates primarily in the legal tech sector, providing products such as business formation services, trademark registration, estate planning, and compliance solutions. LegalZoom aims to make legal services more accessible and affordable, leveraging technology to streamline legal processes for its users.

How the Company Makes Money

LegalZoom generates revenue through a subscription-based model and one-time fees for specific services. Key revenue streams include fees from business formation packages, trademark registrations, and other legal document services. The company also offers premium services, such as access to licensed attorneys for legal advice, which can attract additional revenue. Significant partnerships with various legal professionals and organizations enhance their service offerings and contribute to their earnings by expanding their customer base and providing a diverse range of legal solutions.

LegalZoom Financial Statement Overview

Summary

LegalZoom exhibits strong financial performance with consistent revenue growth and solid profitability margins. The company's low leverage and strong return on equity highlight its financial stability. While there are slight pressures on profitability margins, the robust cash flow generation provides a cushion for future investments and growth opportunities.

Income Statement

LegalZoom's income statement shows a consistent revenue growth trend with a 3.05% increase in the TTM period. The gross profit margin remains strong at 65.71%, indicating efficient cost management. However, the net profit margin slightly decreased to 4.07% from 4.39% in the previous year, suggesting some pressure on profitability. The EBIT and EBITDA margins have also declined, indicating potential challenges in operational efficiency.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.07, indicating minimal leverage and financial risk. The return on equity is strong at 21.52%, showcasing effective use of equity to generate profits. The equity ratio stands at 36.64%, suggesting a stable capital structure with a healthy proportion of equity financing.

Cash Flow

LegalZoom's cash flow statement highlights a robust free cash flow growth rate of 19.13% in the TTM period, demonstrating strong cash generation capabilities. The operating cash flow to net income ratio is 0.50, indicating efficient conversion of income into cash. The free cash flow to net income ratio is high at 0.80, reflecting effective cash management and potential for reinvestment or debt reduction.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	727.48M	681.88M	660.73M	619.98M	575.08M	470.64M
Gross Profit	477.87M	441.79M	421.46M	408.88M	385.72M	316.07M
EBITDA	76.14M	80.59M	60.06M	-23.62M	-74.88M	71.90M
Net Income	22.22M	29.96M	13.95M	-48.73M	-108.66M	9.90M
Balance Sheet
Total Assets	551.10M	373.88M	447.82M	405.39M	431.01M	252.06M
Cash, Cash Equivalents and Short-Term Investments	237.15M	142.06M	225.72M	189.08M	239.30M	114.47M
Total Debt	14.68M	7.88M	9.02M	11.28M	0.00	515.39M
Total Liabilities	349.18M	280.63M	278.98M	263.02M	233.46M	802.70M
Stockholders Equity	201.92M	93.26M	168.83M	142.38M	197.55M	-550.63M
Cash Flow
Free Cash Flow	155.80M	99.94M	92.72M	51.74M	42.41M	82.46M
Operating Cash Flow	186.65M	135.64M	124.31M	73.84M	54.15M	93.05M
Investing Cash Flow	-40.76M	-35.70M	-31.55M	-30.62M	-77.67M	-12.73M
Financing Cash Flow	-20.98M	-183.28M	-56.15M	-93.34M	123.36M	-15.09M

LegalZoom Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.31
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LZ, the sentiment is Negative. The current price of 9.31 is below the 20-day moving average (MA) of 9.79, below the 50-day MA of 10.11, and below the 200-day MA of 9.37, indicating a bearish trend. The MACD of -0.27 indicates Positive momentum. The RSI at 40.32 is Neutral, neither overbought nor oversold. The STOCH value of 28.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LZ.

LegalZoom Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MMS	75 Outperform	$4.72B	15.73	18.14%	1.39%	2.36%	11.30%
UNF	68 Neutral	$2.91B	20.93	6.93%	0.90%	0.20%	2.72%
LZ	66 Neutral	$1.66B	75.08	16.96%	―	7.17%	-5.86%
ABM	66 Neutral	$2.63B	23.35	6.32%	2.47%	4.27%	-24.06%
CBZ	66 Neutral	$2.68B	32.41	7.44%	―	59.19%	-35.47%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FA	51 Neutral	$2.24B	-14.05	-12.48%	―	93.41%	-2515.85%

LegalZoom Corporate Events

LegalZoom’s Earnings Call: Positive Growth and Strategic Advances

LegalZoom.Com, Inc.’s latest earnings call was marked by a largely positive sentiment, underscored by significant growth in revenue and subscriptions, strong profitability, and successful strategic initiatives. The company highlighted its partnerships and AI integration as key drivers of success, despite facing challenges such as a decrease in ARPU and leadership changes. Overall, the positive developments significantly outweighed the negatives, painting an optimistic picture for the company’s future.

LegalZoom’s Q3 2025: Revenue Growth Amid Profit Dip

LegalZoom.com, Inc. is a leading online platform providing legal services to individuals and small businesses, leveraging technology and human expertise to simplify legal processes, particularly in business formation and compliance.

LegalZoom Reports Strong Q3 2025 Financial Results

LegalZoom reported strong financial results for the third quarter of 2025, with a 13% year-over-year increase in revenue to $190.2 million, driven by growth in subscription services. Despite a decrease in net income from $11.1 million in 2024 to $4.5 million in 2025, the company raised its full-year revenue guidance, anticipating approximately 10% growth. The strategic shift towards enhancing offerings for small businesses and the integration of AI and technology are seen as foundational for LegalZoom’s future growth and long-term value creation.

The most recent analyst rating on (LZ) stock is a Buy with a $11.50 price target. To see the full list of analyst forecasts on LegalZoom stock, see the LZ Stock Forecast page.

LegalZoom’s Earnings Call Highlights Growth and Innovation

LegalZoom’s Earnings Call Reflects Optimism Amid Challenges

LegalZoom Reports Strong Q2 2025 Results

LegalZoom.com, Inc. is a leading online platform that offers legal services, enabling individuals and small businesses to navigate the legal system with ease. The company provides a range of services from business formation to estate planning, leveraging technology and a network of experienced attorneys to deliver comprehensive legal solutions.

LegalZoom Reports Strong Q2 2025 Financial Results

On August 7, 2025, LegalZoom reported strong financial results for the second quarter of 2025, with revenue reaching $192.5 million, a 9% increase year-over-year. Despite a slight net loss of $0.3 million, the company saw significant growth in subscription revenue and adjusted EBITDA, leading to an increased revenue growth outlook for 2025 from 5% to 8%.

The most recent analyst rating on (LZ) stock is a Sell with a $7.20 price target. To see the full list of analyst forecasts on LegalZoom stock, see the LZ Stock Forecast page.