LegalZoom.com (NASDAQ:LZ) Rating Lowered to Underperform at Bank of America

LegalZoom.com (NASDAQ:LZ) was downgraded by equities researchers at Bank of America from a “buy” rating to an “underperform” rating in a note issued to investors on Thursday, MarketBeat.com reports.

A number of other equities analysts also recently issued reports on the company. Wall Street Zen raised LegalZoom.com from a “hold” rating to a “buy” rating in a research report on Saturday, September 26th. JPMorgan Chase & Co. cut LegalZoom.com from an “overweight” rating to a “neutral” rating and lowered their price objective for the stock from $8.00 to $7.00 in a research report on Thursday, August 6th. William Blair downgraded LegalZoom.com from an “outperform” rating to a “market perform” rating in a research note on Thursday, August 6th. Finally, Weiss Ratings lowered LegalZoom.com from a “hold (c-)” rating to a “sell (d+)” rating in a research report on Thursday, October 29th. Five research analysts have rated the stock with a Hold rating and four have issued a Sell rating to the company’s stock. According to data from MarketBeat.com, LegalZoom.com currently has an average rating of “Reduce” and a consensus target price of $7.30.

LegalZoom.com Stock Performance

LZ stock opened at $6.91 on Thursday. The firm has a market cap of $1.18 billion, a price-to-earnings ratio of 76.72, a PEG ratio of 1.26 and a beta of 1.16. The firm has a 50-day simple moving average of $6.16 and a two-hundred day simple moving average of $6.53. LegalZoom.com has a one year low of $5.22 and a one year high of $12.40.

LegalZoom.com (NASDAQ:LZ) last issued its quarterly earnings data on Wednesday, November 4th. The company reported $0.19 earnings per share (EPS) for the quarter, hitting analysts’ consensus estimates of $0.19. The firm had revenue of $195.15 million for the quarter, compared to the consensus estimate of $193.83 million. LegalZoom.com had a net margin of 2.13% and a return on equity of 15.83%. The company’s quarterly revenue was up 2.6% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $0.17 EPS. As a group, equities analysts predict that LegalZoom.com will post 0.32 earnings per share for the current fiscal year.

Insider Buying and Selling

In other news, insider Nicole Miller sold 33,479 shares of the company’s stock in a transaction on Tuesday, August 18th. The shares were sold at an average price of $5.51, for a total value of $184,469.29. Following the sale, the insider directly owned 943,453 shares of the company’s stock, valued at $5,198,426.03. This represents a 3.43% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. 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, CFO Noel Watson sold 83,629 shares of the stock in a transaction on Friday, August 21st. The stock was sold at an average price of $5.83, for a total transaction of $487,557.07. Following the completion of the sale, the chief financial officer owned 1,407,801 shares in the company, valued at $8,207,479.83. The trade was a 5.61% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders sold 577,475 shares of company stock worth $3,375,197. 7.40% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the business. State Street Corp grew its position in LegalZoom.com by 3.0% during the 2nd quarter. State Street Corp now owns 4,552,468 shares of the company’s stock worth $27,907,000 after purchasing an additional 132,761 shares during the period. Dimensional Fund Advisors LP boosted its holdings in LegalZoom.com by 3.0% during the first quarter. Dimensional Fund Advisors LP now owns 3,112,895 shares of the company’s stock worth $17,650,000 after buying an additional 91,131 shares in the last quarter. Punch & Associates Investment Management Inc. boosted its holdings in LegalZoom.com by 6.0% during the second quarter. Punch & Associates Investment Management Inc. now owns 2,850,501 shares of the company’s stock worth $17,474,000 after buying an additional 161,231 shares in the last quarter. Bank of America Corp DE boosted its stake in shares of LegalZoom.com by 187.4% during the 1st quarter. Bank of America Corp DE now owns 2,509,891 shares of the company’s stock worth $14,231,000 after acquiring an additional 1,636,487 shares in the last quarter. Finally, Principal Financial Group Inc. boosted its stake in shares of LegalZoom.com by 579.1% during the 1st quarter. Principal Financial Group Inc. now owns 1,010,914 shares of the company’s stock worth $5,732,000 after acquiring an additional 862,045 shares in the last quarter. 81.99% of the stock is currently owned by institutional investors and hedge funds.

Key Stories Impacting LegalZoom.com

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

• Positive Sentiment: Third-quarter revenue was $195.15 million, above the $193.83 million estimate and up 2.6% year over year. EPS of $0.19 also increased from $0.17 a year earlier. MarketBeat earnings report
• Neutral Sentiment: LegalZoom indicated adjusted EBITDA of $180 million to $185 million for fiscal 2026, while also citing pressure from search and targeted investments—factors investors may monitor for their effect on growth and costs. Seeking Alpha outlook report
• Negative Sentiment: Shares fell sharply following the results. While EPS matched the $0.19 consensus cited by some reports, it missed Zacks’ $0.21 estimate. The modest 2.6% revenue growth and the company’s flagged search pressure and investments may have outweighed the sales beat. Zacks earnings report

About LegalZoom.com

LegalZoom.com, Inc is an online platform that provides legal, compliance and tax-related products and services to individuals, families and small businesses. The company’s platform is designed to make common legal and administrative processes more accessible through digital tools, guided services and access to independent professionals.

LegalZoom’s offerings include business formation services for limited liability companies and corporations, registered-agent services, annual compliance support, business licensing and trademark services.