LegalZoom.com (NASDAQ:LZ) Sets New 1-Year Low on Analyst Downgrade

LegalZoom.com, Inc. (NASDAQ:LZ)’s share price hit a new 52-week low during mid-day trading on Thursday after Bank of America downgraded the stock from a buy rating to an underperform rating. The company traded as low as $5.10 and last traded at $5.8940, with a volume of 451,246 shares. The stock had previously closed at $6.90.

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

Insider Activity

In other LegalZoom.com news, insider Nicole Miller sold 33,479 shares of the stock in a transaction that occurred on Tuesday, August 18th. The shares were sold at an average price of $5.51, for a total transaction of $184,469.29. Following the transaction, the insider owned 943,453 shares in the company, valued at $5,198,426.03. This represents a 3.43% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at 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, CFO Noel Watson sold 83,629 shares of the stock in a transaction that occurred 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 transaction, the chief financial officer owned 1,407,801 shares in the company, valued at approximately $8,207,479.83. The trade was a 5.61% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 577,475 shares of company stock valued at $3,375,197 in the last quarter. Corporate insiders own 7.40% of the company’s stock.

Key LegalZoom.com News

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

• Positive Sentiment: Q3 revenue was $195.15 million, above the $193.83 million estimate, and rose 2.6% year over year. EPS of $0.19 matched the consensus cited in the earnings report, while profit increased from $0.17 a year earlier. Article: LegalZoom Q3 profit rises
• Neutral Sentiment: The consensus analyst price target was reported at $7.30. That is a reference point rather than a company-specific catalyst and does not ensure shares will reach that level. Article: LegalZoom consensus target price
• Negative Sentiment: Shares reportedly dropped 20.3% after the Q3 release, despite the revenue beat. One estimate comparison said EPS of $0.19 missed Zacks’ $0.21 consensus, highlighting that results fell short of some expectations. Article: Q3 sales top estimates but stock drops
• Negative Sentiment: Bank of America downgraded LZ from “buy” to “underperform,” a more cautious analyst view that may weigh on investor sentiment. Bank of America ratings
• Negative Sentiment: Management indicated search-related pressure and targeted investment, while projecting $180 million–$185 million in adjusted EBITDA for FY2026. The pressure and spending may concern investors about near-term growth and profitability. Article: LegalZoom FY2026 EBITDA outlook

Institutional Trading of LegalZoom.com

Large investors have recently modified their holdings of the stock. State Street Corp raised its position in LegalZoom.com by 3.0% during the second quarter. State Street Corp now owns 4,552,468 shares of the company’s stock valued at $27,907,000 after purchasing an additional 132,761 shares in the last quarter. Dimensional Fund Advisors LP lifted its stake 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 purchasing an additional 91,131 shares during the last quarter. Punch & Associates Investment Management Inc. boosted its holdings in shares of LegalZoom.com by 6.0% in the 2nd quarter. Punch & Associates Investment Management Inc. now owns 2,850,501 shares of the company’s stock valued at $17,474,000 after purchasing an additional 161,231 shares in the last quarter. Bank of America Corp DE boosted its holdings in shares of LegalZoom.com by 187.4% in the 1st quarter. Bank of America Corp DE now owns 2,509,891 shares of the company’s stock valued at $14,231,000 after purchasing an additional 1,636,487 shares in the last quarter. Finally, Principal Financial Group Inc. boosted its holdings in shares of LegalZoom.com by 579.1% in the 1st quarter. Principal Financial Group Inc. now owns 1,010,914 shares of the company’s stock valued at $5,732,000 after purchasing an additional 862,045 shares in the last quarter. 81.99% of the stock is owned by institutional investors and hedge funds.

LegalZoom.com Trading Down 14.9%

The company has a 50 day moving average price of $6.16 and a 200-day moving average price of $6.53. The company has a market cap of $1.01 billion, a P/E ratio of 65.20, a price-to-earnings-growth ratio of 1.26 and a beta of 1.16.

LegalZoom.com (NASDAQ:LZ) last announced its quarterly earnings data on Wednesday, November 4th. The company reported $0.19 earnings per share for the quarter, hitting the consensus estimate of $0.19. LegalZoom.com had a return on equity of 15.83% and a net margin of 2.13%. The business had revenue of $195.15 million during the quarter, compared to the consensus estimate of $193.83 million. During the same period in the prior year, the company earned $0.17 EPS. LegalZoom.com’s revenue for the quarter was up 2.6% on a year-over-year basis. Equities analysts expect that LegalZoom.com, Inc. will post 0.32 earnings per share for the current year.

LegalZoom.com Company Profile

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.