LegalZoom.com (NASDAQ:LZ) Shares Down 5.8% Following Weak Earnings

LegalZoom.com, Inc. (NASDAQ:LZ)’s stock price traded down 5.8% on Friday following a weaker than expected earnings announcement. The stock traded as low as $6.57 and last traded at $6.6430. 1,976,159 shares changed hands during trading, a decline of 48% from the average session volume of 3,818,944 shares. The stock had previously closed at $7.05.

The company reported $0.17 EPS for the quarter, missing the consensus estimate of $0.18 by ($0.01). The business had revenue of $190.27 million during the quarter, compared to analysts’ expectations of $184.85 million. LegalZoom.com had a return on equity of 9.91% and a net margin of 3.05%.LegalZoom.com’s quarterly revenue was up 17.7% on a year-over-year basis. During the same quarter in the prior year, the firm earned $0.19 earnings per share.

LegalZoom.com announced that its board has initiated a share repurchase plan on Thursday, February 19th that authorizes the company to repurchase $100.00 million in shares. This repurchase authorization authorizes the company to repurchase up to 8.1% of its stock through open market purchases. Stock repurchase plans are typically an indication that the company’s board believes its shares are undervalued.

LegalZoom.com News Roundup

Here are the key news stories impacting LegalZoom.com this week:

• Positive Sentiment: Q4 and full?year results showed revenue and cash flow strength: Q4 revenue beat consensus ($190.3M vs. $184.9M), full?year revenue +11% and record operating cash flow and free cash flow; company reports Adjusted EBITDA exceeded outlook and ended the year with $203.1M cash and no debt. GlobeNewswire: Press Release
• Positive Sentiment: Board authorized a $100 million share repurchase (up to ~8.1% of shares), signaling management views the stock as undervalued and returning capital to shareholders. RTT News: Buyback
• Positive Sentiment: Revenue guidance for FY?2026 ($805M–$825M) is at or slightly above consensus; Q1 revenue guide ($200M–$203M) is roughly in line — supports continued top?line growth expectations. (See company release above.)
• Neutral Sentiment: Results were mixed: EPS missed by $0.01 (reported $0.17 vs. $0.18 consensus) even as revenue grew strongly year?over?year — margin/earnings leverage remains a watch item. MarketBeat: Earnings
• Neutral Sentiment: Management commentary (earnings call transcript) will be important for clarity on margin drivers, customer mix (upmarket shift) and cadence of subscription growth. Seeking Alpha: Transcript
• Neutral Sentiment: Reported short interest data appears anomalous/insignificant in the filings today and is not presenting a meaningful days?to?cover signal.
• Negative Sentiment: JPMorgan has reduced its price target and issued a more cautious outlook on LZ, citing concerns that temper upside expectations — that analyst tone likely pressured the shares. AmericanBankingNews: JPMorgan Pessimistic Forecast (Earlier JPMorgan note lowering PT from $14 to $11 was reported as well.) Benzinga: PT Cut
• Negative Sentiment: Insider selling: CFO Noel Watson sold 15,000 shares at about $6.96. While not large relative to his holdings, insider sales can create near?term downward pressure. SEC Form 4

Analyst Upgrades and Downgrades

Several equities research analysts have commented on LZ shares. Morgan Stanley upped their price target on LegalZoom.com from $8.50 to $9.00 and gave the stock an “underweight” rating in a research note on Thursday, November 13th. JPMorgan Chase & Co. cut their target price on shares of LegalZoom.com from $14.00 to $11.00 and set an “overweight” rating on the stock in a research note on Wednesday. Weiss Ratings reiterated a “hold (c)” rating on shares of LegalZoom.com in a report on Monday, December 29th. Wall Street Zen downgraded LegalZoom.com from a “strong-buy” rating to a “buy” rating in a research report on Saturday, November 1st. Finally, Zacks Research lowered shares of LegalZoom.com from a “hold” rating to a “strong sell” rating in a report on Monday, January 19th. Three analysts have rated the stock with a Buy rating, four have issued a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat, the stock presently has an average rating of “Hold” and a consensus target price of $10.90.

Insider Buying and Selling at LegalZoom.com

In related news, CFO Noel Bertram Watson sold 15,000 shares of the business’s stock in a transaction that occurred on Wednesday, February 18th. The stock was sold at an average price of $6.96, for a total value of $104,400.00. Following the completion of the sale, the chief financial officer directly owned 1,480,860 shares in the company, valued at approximately $10,306,785.60. The trade was a 1.00% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is accessible through this link. Insiders own 5.90% of the company’s stock.

Institutional Investors Weigh In On LegalZoom.com

A number of large investors have recently modified their holdings of the business. Voya Investment Management LLC grew its stake in shares of LegalZoom.com by 368.6% during the 3rd quarter. Voya Investment Management LLC now owns 406,847 shares of the company’s stock worth $4,223,000 after acquiring an additional 320,026 shares during the period. Rice Hall James & Associates LLC bought a new position in shares of LegalZoom.com in the third quarter worth approximately $3,397,000. Y Intercept Hong Kong Ltd purchased a new stake in LegalZoom.com in the second quarter worth approximately $3,340,000. Russell Investments Group Ltd. boosted its stake in shares of LegalZoom.com by 125.1% during the 2nd quarter. Russell Investments Group Ltd. now owns 419,388 shares of the company’s stock valued at $3,729,000 after purchasing an additional 233,056 shares in the last quarter. Finally, JPMorgan Chase & Co. increased its stake in LegalZoom.com by 48.6% during the 2nd quarter. JPMorgan Chase & Co. now owns 1,352,865 shares of the company’s stock valued at $12,054,000 after purchasing an additional 442,345 shares in the last quarter. Institutional investors and hedge funds own 81.99% of the company’s stock.

LegalZoom.com Stock Down 5.9%

The stock has a market capitalization of $1.18 billion, a P/E ratio of 55.63, a P/E/G ratio of 1.19 and a beta of 1.22. The business has a fifty day moving average price of $9.06 and a 200-day moving average price of $9.78.

LegalZoom.com Company Profile

LegalZoom.com, Inc (NASDAQ: LZ) operates as a leading online legal technology company that provides a broad range of legal and business services to individuals, families and small businesses. Through its digital platform, the company offers customized legal documents and filing services, including business formation (LLCs, corporations and nonprofits), estate planning (wills and trusts), intellectual property protection (trademarks and copyrights), and ongoing compliance support. LegalZoom also connects customers with independent attorneys for consultations on matters such as family law, immigration and real estate.

Founded in 2001 by entrepreneurs Brian Lee, Brian P.