LegalZoom (LZ) AI Stock Analysis

• Market Cap: $1.60B
• Dividend Yield: N/A
• Average Volume (3M): 1.72M
• Price to Earnings (P/E): 51.6
• Beta (1Y): 0.83
• 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: 2,032,053
• 30 Day Avg. Volume: 1,716,457
• PEG Ratio: 0.57
• Price to Book (P/B): 10.65
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 29.30
• Enterprise Value/Market Cap: 0.84
• Enterprise Value/Revenue: 0.49
• Enterprise Value/Gross Profit: 2.98
• Enterprise Value/Ebitda: 4.63
• 1Y Price Target: $9.70
• Price Target Upside: 9.73% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 71 Outperform
• Price Target: $10.00 ▲(13.12%Upside)

LegalZoom's overall stock score reflects strong financial performance and strategic corporate actions, tempered by high valuation concerns and mixed technical signals. The company's solid earnings report and strategic initiatives contribute positively, while the expensive valuation and market uncertainties present risks.

Positive Factors

Long-term growth strategy

Management seems to be homing in on a more sustainable model for long-term growth.

Subscription revenue 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 headwinds

The discontinuation of LZ Tax and BOIR requirements is expected to create a four-point headwind to growth.

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's financial statements reflect strong revenue growth, improved profitability, and a robust balance sheet with low leverage and strong cash flow generation, indicating an overall solid financial position.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	690.78M	681.88M	660.73M	619.98M	575.08M	470.64M
Gross Profit	448.70M	441.79M	421.46M	408.88M	385.72M	316.07M
EBITDA	71.26M	80.59M	60.06M	-41.74M	-79.07M	71.90M
Net Income	30.35M	29.96M	13.95M	-48.73M	-108.66M	9.90M
Balance Sheet
Total Assets	532.67M	373.88M	447.82M	405.39M	431.01M	252.06M
Cash, Cash Equivalents and Short-Term Investments	209.97M	142.06M	225.72M	189.08M	239.30M	114.47M
Total Debt	14.61M	7.88M	9.02M	11.28M	0.00	515.39M
Total Liabilities	345.45M	280.63M	278.98M	263.02M	233.46M	802.70M
Stockholders Equity	187.21M	93.26M	168.83M	142.38M	197.55M	-550.63M
Cash Flow
Free Cash Flow	116.55M	99.94M	92.72M	51.74M	42.41M	82.46M
Operating Cash Flow	152.15M	135.64M	124.31M	73.84M	54.15M	93.05M
Investing Cash Flow	-46.67M	-35.70M	-31.55M	-30.62M	-77.67M	-12.73M
Financing Cash Flow	-123.41M	-183.28M	-56.15M	-93.34M	123.36M	-15.09M

LegalZoom Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.84
• 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 8.84 is below the 20-day moving average (MA) of 8.93, above the 50-day MA of 8.51, and above the 200-day MA of 8.14, indicating a neutral trend. The MACD of -0.05 indicates Positive momentum. The RSI at 50.47 is Neutral, neither overbought nor oversold. The STOCH value of 49.76 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
UNF	82 Outperform	$3.33B	23.16	7.17%	0.75%	5.04%	31.69%
MMS	80 Outperform	$3.94B	13.92	17.36%	1.68%	5.29%	31.95%
LZ	71 Outperform	$1.60B	51.58	17.09%	―	3.25%	56.17%
CBZ	71 Outperform	$3.87B	48.37	6.25%	―	32.27%	-40.50%
Sector *	65 Neutral	$10.56B	15.49	5.57%	1.96%	2.71%	-26.28%
ABM	61 Neutral	$2.89B	37.13	4.30%	2.29%	3.52%	-67.27%
FA	59 Neutral	$2.74B	549.40	-13.59%	―	37.97%	-499.29%

LegalZoom Corporate Events

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.