LegalZoom.com (NASDAQ:LZ) Downgraded by Bank of America to Underperform

Bank of America downgraded shares of LegalZoom.com (NASDAQ:LZ) from a buy rating to an underperform rating in a research report report published on Thursday, Marketbeat reports.

A number of other equities research analysts have also issued reports on the company. William Blair lowered LegalZoom.com from an “outperform” rating to a “market perform” rating in a research note on Thursday, August 6th. JPMorgan Chase & Co. cut LegalZoom.com from an “overweight” rating to a “neutral” rating and decreased their price target for the company from $8.00 to $7.00 in a report on Thursday, August 6th. Wall Street Zen upgraded LegalZoom.com from a “hold” rating to a “buy” rating in a research report on Saturday, September 26th. Finally, Weiss Ratings lowered LegalZoom.com from a “hold (c-)” rating to a “sell (d+)” rating in a research note on Thursday, October 29th. Five research analysts have rated the stock with a Hold rating and four have assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Reduce” and a consensus target price of $7.10.

LegalZoom.com Price Performance

Shares of NASDAQ:LZ opened at $5.95 on Thursday. The company has a market capitalization of $1.02 billion, a P/E ratio of 49.59, a P/E/G ratio of 1.30 and a beta of 1.16. LegalZoom.com has a 1-year low of $5.10 and a 1-year high of $12.40. The firm’s 50 day simple moving average is $6.16 and its two-hundred day simple moving average is $6.52.

LegalZoom.com (NASDAQ:LZ) last announced 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 during the quarter, compared to analysts’ expectations of $193.83 million. LegalZoom.com had a net margin of 2.56% and a return on equity of 23.09%. The company’s revenue for the quarter was up 2.6% compared to the same quarter last year. During the same period in the prior year, the company posted $0.17 earnings per share. On average, sell-side analysts anticipate that LegalZoom.com will post 0.32 earnings per share for the current fiscal year.

Insider Buying and Selling at LegalZoom.com

In other LegalZoom.com news, CFO Noel Watson sold 416,371 shares of LegalZoom.com stock in a transaction on Thursday, August 20th. The shares were sold at an average price of $5.91, for a total value of $2,460,752.61. Following the sale, the chief financial officer directly owned 1,491,430 shares in the company, valued at approximately $8,814,351.30. The trade was a 21.82% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, insider Nicole Miller sold 43,996 shares of LegalZoom.com stock in a transaction dated Monday, August 17th. The stock was sold at an average price of $5.51, for a total value of $242,417.96. Following the completion of the sale, the insider directly owned 976,932 shares in the company, valued at $5,382,895.32. This trade represents a 4.31% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. 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. Insiders sold 577,475 shares of company stock worth $3,375,197 in the last three months. Insiders own 7.40% of the company’s stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of LZ. Allworth Financial LP grew its position in LegalZoom.com by 255.1% in the second quarter. Allworth Financial LP now owns 5,014 shares of the company’s stock worth $31,000 after acquiring an additional 3,602 shares in the last quarter. PNC Financial Services Group Inc. increased its stake in 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 during the last quarter. Integrated Wealth Concepts LLC bought a new stake in LegalZoom.com during the second quarter worth approximately $47,000. Cetera Investment Advisers purchased a new stake in LegalZoom.com during the first quarter valued at approximately $58,000. Finally, Headlands Technologies LLC purchased a new stake in LegalZoom.com during the second quarter valued at approximately $67,000. 81.99% of the stock is owned by hedge funds and other institutional investors.

Key Headlines 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 consensus estimate and up 2.6% year over year. EPS of $0.19 matched the $0.19 consensus cited by MarketBeat, though it fell short of the $0.21 Zacks estimate. MarketBeat earnings report
• Neutral Sentiment: LegalZoom projected $180 million–$185 million in adjusted EBITDA for fiscal 2026; reports also cited pressure from search and targeted investments, which may affect the outlook. Seeking Alpha outlook report
• Negative Sentiment: Business formation volume fell 13% year over year to 110,000, pointing to softness in a key part of the business. Human-in-the-loop subscriptions accounted for 49% of third-quarter revenue. The Motley Fool analysis
• Negative Sentiment: Bank of America cut its rating from “buy” to “underperform.” JPMorgan also lowered its price target from $7 to $6 and retained a “neutral” rating, signaling limited expected upside at the cited price. Bank of America rating update JPMorgan rating update

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.