LegalZoom (LZ) AI Stock Analysis

• Market Cap: $1.90B
• Dividend Yield: N/A
• Average Volume (3M): 2.90M
• Price to Earnings (P/E): 64.8
• Beta (1Y): 0.89
• Revenue Growth: 4.19%
• EPS Growth: 48.69%
• Country: US
• Employees: 964
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 0.15
• Shares Outstanding: 180,249,370
• 10 Day Avg. Volume: 2,403,135
• 30 Day Avg. Volume: 2,895,702
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.74
• Enterprise Value/Revenue: 2.00
• Enterprise Value/Gross Profit: 3.04
• Enterprise Value/Ebitda: 20.03
• 1Y Price Target: $11.94
• Price Target Upside: 13.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 76 Outperform
• Price Target: $12.00 ▲(13.64% Upside)

LegalZoom's overall stock score is driven by strong financial performance and bullish technical indicators. The company's strategic focus on subscription growth and partnerships enhances its market position. However, high valuation and challenges in retention rates and ARPU present risks. Governance improvements and financial oversight add to the positive outlook.

Positive Factors

Revenue Growth

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

Subscription Model Success

Growth in subscriptions suggests a successful shift towards recurring revenue, ensuring predictable cash flows and customer loyalty.

Strategic Partnerships

Partnerships with AI pioneers enhance brand presence and innovation, potentially driving customer acquisition and competitive advantage.

Negative Factors

Decreased Retention Rates

Falling retention rates can undermine long-term revenue stability, indicating potential customer dissatisfaction or competitive pressures.

ARPU Decline

A decline in ARPU suggests a shift towards lower-priced offerings, which may impact profitability and revenue growth if not managed.

Seasonality Concerns

Seasonal revenue fluctuations can lead to unpredictable cash flows, complicating financial planning and stability over time.

LegalZoom Business Overview & Revenue Model

Company Description

LegalZoom.com, Inc. operates an online platform for legal and compliance solutions in the United States. The company's platform offers products and services, including business formations, creating estate planning documents, protecting intellectual property, completing certain forms and agreements, providing access to independent attorney advice, and connecting customers with experts for tax preparation and bookkeeping services. It serves small businesses and individuals. LegalZoom.com, Inc. was incorporated in 1999 and is headquartered in Glendale, California.

How the Company Makes Money

LegalZoom makes money primarily through a subscription-based model and one-time transaction fees for its various services. The company offers several subscription plans that provide ongoing legal advice and support, catering to both businesses and individuals. Additionally, LegalZoom generates revenue from one-time services such as business formations, trademark registrations, and estate planning document preparation. Partnerships with legal professionals and other service providers also contribute to its revenue by enhancing its product offerings and expanding its customer base. The company leverages its online platform to reach a broad audience, making legal services more accessible and driving its revenue growth.

LegalZoom Financial Statement Overview

Summary

LegalZoom demonstrates consistent revenue growth and strong cash flow generation. While profitability margins could be improved, the company maintains a low leverage profile and effectively utilizes its equity. The financial health is stable, with potential for enhanced profitability.

Income Statement

LegalZoom has shown consistent revenue growth over the years, with a TTM revenue growth rate of 2.19%. The gross profit margin remains strong at 65.71% for the TTM, indicating efficient cost management. However, the net profit margin is relatively low at 4.07%, suggesting room for improvement in profitability. The EBIT and EBITDA margins are moderate, reflecting stable operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is low at 0.07, indicating a conservative leverage strategy. The return on equity for the TTM is healthy at 21.52%, showing effective use of equity to generate profits. The equity ratio is not explicitly provided, but the balance sheet appears stable with a solid equity base.

Cash Flow

LegalZoom exhibits strong cash flow management with a free cash flow growth rate of 12.22% in the TTM. The operating cash flow to net income ratio is 0.50, indicating robust cash generation relative to net income. The free cash flow to net income ratio of 0.80 further underscores the company's ability to convert earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	705.92M	681.88M	660.73M	619.98M	575.08M	470.64M
Gross Profit	463.87M	441.79M	421.46M	408.88M	385.72M	316.07M
EBITDA	70.34M	80.59M	60.06M	-25.93M	-60.80M	71.90M
Net Income	28.77M	29.96M	13.95M	-48.73M	-108.66M	9.90M
Balance Sheet
Total Assets	543.03M	373.88M	447.82M	405.39M	431.01M	252.06M
Cash, Cash Equivalents and Short-Term Investments	217.03M	142.06M	225.72M	189.08M	239.30M	114.47M
Total Debt	14.39M	7.88M	9.02M	11.28M	0.00	515.39M
Total Liabilities	348.98M	280.63M	278.98M	263.02M	233.46M	802.70M
Stockholders Equity	194.05M	93.26M	168.83M	142.38M	197.55M	-550.63M
Cash Flow
Free Cash Flow	130.79M	99.94M	92.72M	51.74M	42.41M	82.46M
Operating Cash Flow	164.04M	135.64M	124.31M	73.84M	54.15M	93.05M
Investing Cash Flow	-43.16M	-35.70M	-31.55M	-30.62M	-77.67M	-12.73M
Financing Cash Flow	-22.50M	-183.28M	-56.15M	-93.34M	123.36M	-15.09M

LegalZoom Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.56
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 10.56 is below the 20-day moving average (MA) of 10.75, above the 50-day MA of 9.83, and above the 200-day MA of 8.87, indicating a neutral trend. The MACD of 0.16 indicates Positive momentum. The RSI at 53.30 is Neutral, neither overbought nor oversold. The STOCH value of 27.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LZ.

LegalZoom Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MMS	76 Outperform	$5.05B	16.50	17.61%	1.34%	3.40%	13.75%
LZ	76 Outperform	$1.90B	64.83	22.58%	―	4.19%	48.69%
UNF	74 Outperform	$3.06B	21.07	7.15%	0.82%	4.18%	18.93%
ABM	70 Outperform	$2.80B	24.88	6.32%	2.23%	4.27%	-24.06%
CBZ	65 Neutral	$3.01B	32.12	7.84%	―	46.49%	-25.62%
Sector *	63 Neutral	$10.74B	15.33	7.44%	2.00%	2.86%	-14.57%
FA	52 Neutral	$2.75B	549.40	-13.57%	―	65.34%	-633.72%

LegalZoom Corporate Events

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%.

LegalZoom Amends Credit Agreement, Reduces Loan Commitments

On July 14, 2025, LegalZoom.com, Inc. amended its credit agreement, reducing its revolving loan commitments from $150 million to $100 million while extending the maturity date to July 14, 2030. The amendment also introduces interest rate margin reductions based on leverage ratios and removes a credit spread adjustment, indicating a strategic financial restructuring to optimize the company’s credit facilities.

LegalZoom Elects Directors and Approves Key Decisions

On June 3, 2025, LegalZoom.com, Inc. held its annual meeting of stockholders where key decisions were made. Two directors, Nathan Gooden and Neil Tolaney, were elected to serve three-year terms. Additionally, PricewaterhouseCoopers LLP was ratified as the company’s independent registered public accounting firm for 2025, and the compensation of the company’s named executive officers was approved. These decisions are likely to impact the company’s governance and financial oversight positively.