LegalZoom.com (NASDAQ:LZ) Stock Gets Downgrade from Bank of America

Key Points

• Bank of America downgraded LegalZoom from “buy” to “underperform.” Analysts overall rate the stock “Reduce,” with a consensus price target of $7.30.
• For the quarter, LegalZoom reported EPS of $0.19, in line with consensus, and revenue of $195.15 million, above estimates and up 2.6% year over year.
• The company cited search-related pressure and targeted investments alongside its fiscal 2026 adjusted EBITDA outlook of $180 million to $185 million; shares fell sharply after the results.

LegalZoom.com (NASDAQ:LZ - Get Free Report) was downgraded by equities researchers at Bank of America from a "buy" rating to an "underperform" rating in a research note issued on Thursday, MarketBeat Ratings reports.

A number of other research analysts also recently issued reports on LZ. Wall Street Zen upgraded LegalZoom.com from a "hold" rating to a "buy" rating in a research note on Saturday, September 26th. JPMorgan Chase & Co. cut shares of LegalZoom.com from an "overweight" rating to a "neutral" rating and decreased their target price for the stock from $8.00 to $7.00 in a research note on Thursday, August 6th. William Blair lowered shares of LegalZoom.com from an "outperform" rating to a "market perform" rating in a research report on Thursday, August 6th. Finally, Weiss Ratings cut shares of 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 stock. Based on data from MarketBeat, the stock currently has an average rating of "Reduce" and a consensus target price of $7.30.

LegalZoom.com Stock Performance

Shares of LegalZoom.com stock opened at $6.91 on Thursday. LegalZoom.com has a one year low of $5.22 and a one year high of $12.40. The stock's fifty day moving average is $6.16 and its 200 day moving average is $6.53. The stock has a market cap of $1.18 billion, a P/E ratio of 76.72, a P/E/G ratio of 1.26 and a beta of 1.16.

LegalZoom.com (NASDAQ:LZ - Get Free Report) last released its earnings results on Wednesday, November 4th. The company reported $0.19 earnings per share for the quarter, meeting the consensus estimate of $0.19. LegalZoom.com had a return on equity of 15.83% and a net margin of 2.13%. The company had revenue of $195.15 million for the quarter, compared to the consensus estimate of $193.83 million. During the same period in the previous year, the business earned $0.17 earnings per share. LegalZoom.com's quarterly revenue was up 2.6% compared to the same quarter last year. Analysts predict that LegalZoom.com will post 0.32 EPS for the current year.

Insider Activity at LegalZoom.com

In related news, CFO Noel Watson sold 83,629 shares of the business's stock in a transaction that occurred on Friday, August 21st. The stock was sold at an average price of $5.83, for a total value of $487,557.07. Following the transaction, the chief financial officer directly owned 1,407,801 shares of the company's stock, valued at approximately $8,207,479.83. The trade was a 5.61% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, insider Nicole Miller sold 33,479 shares of the company's stock in a transaction that occurred on Tuesday, August 18th. The stock was sold at an average price of $5.51, for a total value of $184,469.29. Following the completion of the transaction, the insider owned 943,453 shares of the company's stock, valued at $5,198,426.03. The trade was a 3.43% 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 have sold a total of 577,475 shares of company stock worth $3,375,197 in the last three months. 7.40% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On LegalZoom.com

Institutional investors have recently bought and sold shares of the stock. Allspring Global Investments Holdings LLC lifted its position in shares of LegalZoom.com by 11.2% in the first quarter. Allspring Global Investments Holdings LLC now owns 27,012 shares of the company's stock worth $154,000 after buying an additional 2,716 shares in the last quarter. Allworth Financial LP lifted its stake 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 during the period. Arkadios Wealth Advisors raised its holdings in shares of LegalZoom.com by 5.6% in the 1st quarter. Arkadios Wealth Advisors now owns 74,819 shares of the company's stock valued at $424,000 after purchasing an additional 3,953 shares in the last quarter. PNC Financial Services Group Inc. boosted its stake 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 valued at $43,000 after purchasing an additional 7,534 shares in the last quarter. Finally, Integrated Wealth Concepts LLC purchased a new position in LegalZoom.com during the second quarter valued at approximately $47,000. 81.99% of the stock is owned by hedge funds and other institutional investors.

LegalZoom.com News Roundup

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

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.

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