LegalZoom.com (NASDAQ:LZ) Downgraded by William Blair to Market Perform

LegalZoom.com (NASDAQ:LZ) was downgraded by research analysts at William Blair from an “outperform” rating to a “market perform” rating in a research note issued to investors on Thursday.

A number of other research firms have also recently issued reports on LZ. UBS Group cut their price target on LegalZoom.com from $8.00 to $7.00 and set a “neutral” rating on the stock in a report on Thursday, May 7th. Wall Street Zen upgraded shares of LegalZoom.com from a “hold” rating to a “buy” rating in a research report on Tuesday, July 28th. Citigroup cut their target price on shares of LegalZoom.com from $8.50 to $7.50 and set a “neutral” rating on the stock in a research note on Friday, May 22nd. Weiss Ratings restated a “sell (d+)” rating on shares of LegalZoom.com in a report on Thursday, July 2nd. Finally, JPMorgan Chase & Co. reaffirmed a “neutral” rating and issued a $7.00 price target (down from $8.00) on shares of LegalZoom.com in a research note on Thursday. One research analyst has rated the stock with a Buy rating, five have given a Hold rating and three have assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Reduce” and an average price target of $8.08.

LegalZoom.com Price Performance

Shares of NASDAQ:LZ opened at $8.10 on Thursday. LegalZoom.com has a 1 year low of $5.22 and a 1 year high of $12.40. The business’s 50-day moving average is $6.76 and its 200-day moving average is $6.75. The company has a market capitalization of $1.39 billion, a price-to-earnings ratio of 135.02, a P/E/G ratio of 1.40 and a beta of 1.28.

LegalZoom.com (NASDAQ:LZ) last released its earnings results on Wednesday, August 5th. The company reported $0.16 EPS for the quarter, topping the consensus estimate of $0.15 by $0.01. The business had revenue of $205.29 million during the quarter, compared to analysts’ expectations of $205.83 million. LegalZoom.com had a return on equity of 11.53% and a net margin of 1.46%.The firm’s revenue was up 6.6% on a year-over-year basis. During the same quarter last year, the firm posted $0.15 earnings per share. Analysts anticipate that LegalZoom.com will post 0.34 EPS for the current year.

Insider Activity

In other news, insider Nicole Miller sold 19,199 shares of the business’s stock in a transaction that occurred on Tuesday, May 19th. The stock was sold at an average price of $6.58, for a total transaction of $126,329.42. Following the completion of the sale, the insider owned 1,119,222 shares in the company, valued at $7,364,480.76. The trade was a 1.69% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Jeffrey M. Stibel bought 125,000 shares of the stock in a transaction dated Monday, May 11th. The shares were purchased at an average cost of $6.15 per share, for a total transaction of $768,750.00. Following the completion of the transaction, the chief executive officer directly owned 2,955,609 shares of the company’s stock, valued at $18,176,995.35. This trade represents a 4.42% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. Corporate insiders own 7.40% of the company’s stock.

Institutional Inflows and Outflows

Institutional investors have recently bought and sold shares of the business. Osaic Holdings Inc. lifted its stake in shares of LegalZoom.com by 477.3% in the second quarter. Osaic Holdings Inc. now owns 4,555 shares of the company’s stock valued at $41,000 after buying an additional 3,766 shares in the last quarter. EverSource Wealth Advisors LLC increased its position in shares of LegalZoom.com by 976.4% during the second quarter. EverSource Wealth Advisors LLC now owns 4,564 shares of the company’s stock worth $41,000 after acquiring an additional 4,140 shares in the last quarter. PNC Financial Services Group Inc. increased its position in shares of LegalZoom.com by 11,415.2% during the first quarter. PNC Financial Services Group Inc. now owns 7,600 shares of the company’s stock worth $43,000 after acquiring an additional 7,534 shares in the last quarter. Parallel Advisors LLC raised its holdings in shares of LegalZoom.com by 8,589.8% in the 3rd quarter. Parallel Advisors LLC now owns 5,127 shares of the company’s stock worth $53,000 after acquiring an additional 5,068 shares during the last quarter. Finally, Cetera Investment Advisers acquired a new stake in shares of LegalZoom.com in the 1st quarter worth about $58,000. Institutional investors and hedge funds own 81.99% of the company’s stock.

LegalZoom.com News Summary

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

• Positive Sentiment: LegalZoom reported second-quarter adjusted earnings of $0.16 per share, above the $0.15 consensus estimate. Revenue rose 6.6% year over year to $205.3 million, while subscription revenue increased 11% to $133.4 million, marking the fifth consecutive quarter of double-digit subscription growth. LegalZoom Reports Second Quarter 2026 Financial Results
• Positive Sentiment: Profitability and cash generation improved: adjusted EBITDA was $45.9 million, ahead of the high end of guidance, with a 22% margin. LegalZoom generated $33.7 million in free cash flow, ended the quarter debt-free with $167.2 million in cash, and repurchased $45.5 million of stock. LegalZoom Reports Second Quarter 2026 Financial Results
• Neutral Sentiment: Management said it is diversifying customer-acquisition channels and expanding human-in-the-loop services as customers increasingly discover products through AI-powered search rather than traditional Google search. The company also highlighted its LegalZoom services integration with Microsoft 365 Copilot as a potential distribution opportunity. LegalZoom Q2 2026 Earnings Call Transcript
• Negative Sentiment: LegalZoom lowered its full-year 2026 revenue forecast to $795 million-$805 million, below the roughly $822 million analyst consensus. The company also issued third-quarter revenue guidance of $192 million-$196 million versus expectations of approximately $204.4 million. LegalZoom 2026 Revenue Outlook
• Negative Sentiment: The weaker outlook overshadowed the quarterly EPS beat and raised concerns about near-term customer acquisition and growth. Those concerns are particularly important given LZ’s elevated valuation, including a reported P/E ratio above 135.

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.