LegalZoom (LZ) AI Stock Analysis

• Market Cap: $1.62B
• Dividend Yield: N/A
• Average Volume (3M): 1.59M
• Price to Earnings (P/E): 52.2
• Beta (1Y): 0.79
• Revenue Growth: 3.25%
• EPS Growth: 56.17%
• Country: US
• Employees: 964
• Sector: Industrials
• Sector Strength: 87
• Industry: Specialty Business Services
• EPS (TTM): 0.13
• Shares Outstanding: 181,184,390
• 10 Day Avg. Volume: 1,537,980
• 30 Day Avg. Volume: 1,587,969
• PEG Ratio: N/A
• Price to Book (P/B): 8.33
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.72
• Enterprise Value/Market Cap: 0.86
• Enterprise Value/Revenue: 0.51
• Enterprise Value/Gross Profit: 3.11
• Enterprise Value/Ebitda: 4.83
• 1Y Price Target: $9.25
• Price Target Upside: 3.47% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 68 Neutral
• Price Target: $9.50 ▲(6.26%Upside)

LegalZoom's overall stock score is driven primarily by its strong financial performance and positive corporate events. However, the high valuation and neutral technical indicators, alongside mixed earnings call sentiments, moderate the score, indicating a balanced but cautious outlook.

Positive Factors

Financial Performance

LegalZoom reported strong first-quarter results, with revenue and free cash flow exceeding estimates.

Strategic Growth

Management is laser-focused on growing its subscription business, even as they expect the overall business formation macro to be flat.

Negative Factors

Market Conditions

Business formations were down 15% year-over-year, attributed to a softer macroeconomic environment and a shift in focus towards higher value customers.

Revenue Challenges

An aggregate four-point headwind is expected from the discontinuation of LZ Tax and BOIR, impacting transactional revenue.

LegalZoom Business Overview & Revenue Model

Company Description

LegalZoom (LZ) is a leading online platform that offers legal and compliance solutions to small businesses, families, and individuals. The company operates in the legal services sector, providing a range of services including business formation, estate planning, intellectual property, and other legal document services. LegalZoom aims to simplify the process of accessing legal assistance, making it more affordable and accessible through its technology-driven solutions.

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's financial statements reflect strong revenue growth, profitability improvements, and a stable balance sheet. The company's low leverage and robust cash flow generation reduce financial risks, supporting a positive outlook.

Income Statement

LegalZoom's income statement shows strong performance with a consistent revenue growth rate from $575.08M in 2021 to $690.78M in TTM (Trailing-Twelve-Months), marking a significant growth trajectory. The gross profit margin is robust at 64.95% for TTM, indicating efficient cost management. Net profit margin improved to 4.39% in TTM, reflecting better profitability. EBIT and EBITDA margins are also improving, showing operational efficiency.

Balance Sheet

The balance sheet is solid with a healthy equity position and improving financial stability. The debt-to-equity ratio is low at 0.08, indicating low leverage and financial risk. Return on Equity (ROE) is strong at 16.21% in TTM, showing effective use of equity. The equity ratio stands at 35.14%, highlighting a stable financial structure.

Cash Flow

Cash flow analysis indicates strong cash generation capabilities with a notable free cash flow growth of 16.62% in TTM. The operating cash flow to net income ratio at 5.01 suggests efficient cash flow conversion. Free cash flow to net income ratio is solid at 3.84, reflecting strong cash profitability.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	681.88M	660.73M	619.98M	575.08M	470.64M
Gross Profit	441.79M	421.46M	408.88M	385.72M	316.07M
EBITDA	80.59M	60.06M	-41.74M	-79.07M	71.90M
Net Income	29.96M	13.95M	-48.73M	-108.66M	9.90M
Balance Sheet
Total Assets	373.88M	447.82M	405.39M	431.01M	252.06M
Cash, Cash Equivalents and Short-Term Investments	142.06M	225.72M	189.08M	239.30M	114.47M
Total Debt	7.88M	9.02M	11.28M	0.00	515.39M
Total Liabilities	280.63M	278.98M	263.02M	233.46M	802.70M
Stockholders Equity	93.26M	168.83M	142.38M	197.55M	-550.63M
Cash Flow
Free Cash Flow	99.94M	92.72M	51.74M	42.41M	82.46M
Operating Cash Flow	135.64M	124.31M	73.84M	54.15M	93.05M
Investing Cash Flow	-35.70M	-31.55M	-30.62M	-77.67M	-12.73M
Financing Cash Flow	-183.28M	-56.15M	-93.34M	123.36M	-15.09M

LegalZoom Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.94
• 50DMA: Negative
• 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 8.94 is above the 20-day moving average (MA) of 8.90, below the 50-day MA of 9.06, and above the 200-day MA of 8.33, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 51.87 is Neutral, neither overbought nor oversold. The STOCH value of 33.56 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	80 Outperform	$4.00B	14.12	17.36%	1.68%	5.29%	31.95%
ABM	75 Outperform	$2.98B	38.32	4.30%	2.13%	3.52%	-67.27%
CBZ	74 Outperform	$4.06B	49.44	6.25%	―	32.27%	-40.50%
LZ	68 Neutral	$1.62B	52.16	17.09%	―	3.25%	56.17%
Sector *	61 Neutral	C$6.55B	7.69	3.45%	2.55%	6.50%	-23.02%
UNF	61 Neutral	$3.13B	21.54	7.15%	0.79%	4.18%	18.93%
FA	60 Neutral	$3.13B	549.40	-13.59%	―	37.97%	-499.29%

LegalZoom Corporate Events

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.

The most recent analyst rating on (LZ) stock is a Sell with a $8.00 price target. To see the full list of analyst forecasts on LegalZoom stock, see the LZ Stock Forecast page.

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.

The most recent analyst rating on (LZ) stock is a Sell with a $8.00 price target. To see the full list of analyst forecasts on LegalZoom stock, see the LZ Stock Forecast page.

LegalZoom Expands Stock Buyback Program by $100 Million

On May 7, 2025, LegalZoom announced a $100 million increase in its stock repurchase program, bringing the total authorization to $315 million, with $150 million available for future repurchases. This move reflects confidence in its financial health following a strong first quarter in 2025, where revenue grew by 5% year-over-year to $183.1 million, driven by an 8% increase in subscription revenue. LegalZoom’s acquisition of Formation Nation and the appointment of a new Chief Technology Officer are expected to enhance its service offerings and technological capabilities.