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

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

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

LegalZoom.com Stock Performance

Shares of LZ stock opened at $8.10 on Thursday. LegalZoom.com has a fifty-two week low of $5.22 and a fifty-two week high of $12.40. The company has a market cap of $1.39 billion, a PE ratio of 135.02, a P/E/G ratio of 1.40 and a beta of 1.28. The stock’s fifty day moving average price is $6.76 and its two-hundred day moving average price is $6.75.

LegalZoom.com (NASDAQ:LZ) last announced its quarterly earnings data on Wednesday, August 5th. The company reported $0.16 earnings per share 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 the consensus estimate of $205.83 million. LegalZoom.com had a return on equity of 11.53% and a net margin of 1.46%.LegalZoom.com’s revenue for the quarter was up 6.6% on a year-over-year basis. During the same period in the prior year, the company earned $0.15 EPS. On average, equities analysts predict that LegalZoom.com will post 0.34 EPS for the current fiscal year.

Insider Activity at LegalZoom.com

In related news, CFO Noel Bertram Watson sold 15,000 shares of LegalZoom.com stock in a transaction that occurred on Monday, May 18th. The shares were sold at an average price of $6.45, for a total transaction of $96,750.00. Following the sale, the chief financial officer directly owned 2,041,847 shares in the company, valued at $13,169,913.15. This trade represents a 0.73% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, 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, CEO Jeffrey M. Stibel bought 125,000 shares of LegalZoom.com stock in a transaction on Monday, May 11th. The shares were acquired at an average cost of $6.15 per share, for a total transaction of $768,750.00. Following the completion of the acquisition, the chief executive officer directly owned 2,955,609 shares in the company, valued at approximately $18,176,995.35. The trade was a 4.42% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. 7.40% of the stock is owned by company insiders.

Institutional Trading of LegalZoom.com

A number of institutional investors and hedge funds have recently bought and sold shares of the stock. Brighton Jones LLC acquired a new stake in shares of LegalZoom.com in the fourth quarter valued at about $185,000. Amundi bought a new stake in LegalZoom.com in the first quarter valued at approximately $196,000. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its holdings in LegalZoom.com by 3.0% in the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 74,980 shares of the company’s stock valued at $646,000 after acquiring an additional 2,161 shares during the last quarter. Goldman Sachs Group Inc. increased its position in LegalZoom.com by 9.5% during the 1st quarter. Goldman Sachs Group Inc. now owns 1,313,429 shares of the company’s stock valued at $11,309,000 after purchasing an additional 113,769 shares during the period. Finally, UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC increased its position in LegalZoom.com by 1.7% during the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 275,978 shares of the company’s stock valued at $2,376,000 after purchasing an additional 4,607 shares during the period. 81.99% of the stock is currently owned by institutional investors and hedge funds.

LegalZoom.com News Roundup

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.

About LegalZoom.com

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.