LegalZoom (LZ) AI Stock Analysis

• Market Cap: $1.87B
• Dividend Yield: N/A
• Average Volume (3M): 2.11M
• Price to Earnings (P/E): 62.9
• Beta (1Y): 1.00
• 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: 2,049,120
• 30 Day Avg. Volume: 2,112,971
• 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: 0.75
• Enterprise Value/Revenue: 2.00
• Enterprise Value/Gross Profit: 3.04
• Enterprise Value/Ebitda: 20.03
• 1Y Price Target: $11.94
• Price Target Upside: 16.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 71 Outperform
• Price Target: $11.50 ▲(12.30% Upside)

LegalZoom's overall stock score is driven by its solid financial performance and positive earnings call, which highlight strong revenue growth and strategic initiatives. However, the high P/E ratio suggests overvaluation, and technical indicators show neutral momentum, balancing the overall score.

Positive Factors

Revenue Growth

LegalZoom's strong revenue growth indicates robust demand for its services, enhancing its market position and supporting long-term financial health.

Subscription Model Success

The success of the subscription model shows effective customer retention and revenue predictability, crucial for sustainable growth.

Strategic Partnerships

Partnerships with AI pioneers enhance LegalZoom's technological capabilities, driving innovation and competitive advantage in the legal tech sector.

Negative Factors

Decreased Retention Rates

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

ARPU Decline

A decline in ARPU suggests pricing pressures or a shift to lower-value offerings, which may affect profitability and revenue growth.

Seasonality Concerns

Seasonal revenue fluctuations from Formation Nation could lead to inconsistent financial performance, challenging long-term planning and stability.

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 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 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: 10.24
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 10.24 is above the 20-day moving average (MA) of 10.14, below the 50-day MA of 10.51, and above the 200-day MA of 9.24, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 49.26 is Neutral, neither overbought nor oversold. The STOCH value of 68.25 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
LZ	―	$1.87B	62.86	22.58%	―	4.19%	48.69%
ABM	―	$2.80B	24.82	6.32%	2.33%	4.27%	-24.06%
CBZ	―	$2.88B	30.43	7.84%	―	46.49%	-25.62%
MMS	―	$4.94B	16.17	17.61%	1.39%	3.40%	13.75%
UNF	―	$2.88B	20.23	6.93%	0.87%	0.21%	2.72%
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FA	―	$2.46B	549.40	-13.57%	―	65.34%	-633.72%

LegalZoom Corporate Events

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.