LegalZoom.com (NASDAQ:LZ) Reaches New 1-Year Low - Should You Sell?

Key Points

• LegalZoom hit a new 52-week low, trading as low as $6.11 (last $6.1550) on heavy volume, while Wall Street’s consensus rating is a "Hold" with a $9.42 average price target amid several recent analyst target cuts.
• Latest quarter showed revenue of $190.27M (up 17.7% YoY) that beat estimates while EPS missed slightly ($0.17 vs. $0.18), and the Board approved a $100 million buyback program (~8.1% of shares outstanding).
• Company insiders have been selling shares recently (including the CFO), though institutional ownership remains high at about 82% and insiders hold 5.90% of the stock.

LegalZoom.com, Inc. (NASDAQ:LZ - Get Free Report)'s stock price reached a new 52-week low during mid-day trading on Thursday . The company traded as low as $6.11 and last traded at $6.1550, with a volume of 1057378 shares. The stock had previously closed at $6.29.

Wall Street Analyst Weigh In

LZ has been the subject of a number of research reports. JPMorgan Chase & Co. lowered their target price on LegalZoom.com from $14.00 to $11.00 and set an "overweight" rating for the company in a research report on Wednesday, February 18th. UBS Group reduced their price target on shares of LegalZoom.com from $12.00 to $8.00 and set a "neutral" rating on the stock in a research report on Friday, February 20th. Citigroup decreased their price target on shares of LegalZoom.com from $12.00 to $10.50 and set a "neutral" rating on the stock in a research note on Friday, November 21st. Morgan Stanley lifted their price objective on shares of LegalZoom.com from $8.50 to $9.00 and gave the stock an "underweight" rating in a research note on Thursday, November 13th. Finally, Weiss Ratings restated a "hold (c)" rating on shares of LegalZoom.com in a report on Monday, December 29th. Three equities research analysts have rated the stock with a Buy rating, five have assigned a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat, the stock presently has a consensus rating of "Hold" and a consensus price target of $9.42.

LegalZoom.com Stock Performance

The company has a market cap of $1.07 billion, a PE ratio of 77.01, a price-to-earnings-growth ratio of 1.37 and a beta of 1.25. The company has a fifty day moving average of $8.09 and a two-hundred day moving average of $9.43.

LegalZoom.com (NASDAQ:LZ - Get Free Report) last posted its quarterly earnings data on Thursday, February 19th. The company reported $0.17 EPS for the quarter, missing the consensus estimate of $0.18 by ($0.01). LegalZoom.com had a return on equity of 6.35% and a net margin of 2.04%.The firm had revenue of $190.27 million for the quarter, compared to analysts' expectations of $184.85 million. During the same period in the previous year, the firm earned $0.19 earnings per share. The firm's quarterly revenue was up 17.7% compared to the same quarter last year. On average, equities analysts forecast that LegalZoom.com, Inc. will post 0.25 EPS for the current year.

LegalZoom.com announced that its Board of Directors has initiated a stock buyback program on Thursday, February 19th that permits the company to repurchase $100.00 million in shares. This repurchase authorization permits the company to reacquire up to 8.1% of its shares through open market purchases. Shares repurchase programs are typically an indication that the company's board of directors believes its shares are undervalued.

Insider Buying and Selling

In related news, CFO Noel Bertram Watson sold 15,000 shares of the firm's stock in a transaction that occurred on Wednesday, February 18th. The stock was sold at an average price of $6.96, for a total transaction of $104,400.00. Following the completion of the sale, the chief financial officer directly owned 1,480,860 shares of the company's stock, valued at approximately $10,306,785.60. This trade represents a 1.00% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, insider Nicole Miller sold 23,325 shares of the company's stock in a transaction on Thursday, February 26th. The shares were sold at an average price of $6.63, for a total value of $154,644.75. Following the completion of the transaction, the insider directly owned 813,033 shares in the company, valued at $5,390,408.79. This trade represents a 2.79% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Corporate insiders own 5.90% of the company's stock.

Institutional Trading of LegalZoom.com

Several institutional investors and hedge funds have recently made changes to their positions in the business. Pacer Advisors Inc. lifted its position in shares of LegalZoom.com by 8.8% during the fourth quarter. Pacer Advisors Inc. now owns 603,224 shares of the company's stock worth $5,990,000 after purchasing an additional 48,894 shares during the last quarter. Invesco Ltd. grew its holdings in shares of LegalZoom.com by 17.6% in the fourth quarter. Invesco Ltd. now owns 224,563 shares of the company's stock worth $2,230,000 after purchasing an additional 33,543 shares during the last quarter. Mercer Global Advisors Inc. ADV increased its stake in LegalZoom.com by 18.2% in the 4th quarter. Mercer Global Advisors Inc. ADV now owns 42,864 shares of the company's stock worth $426,000 after buying an additional 6,586 shares during the period. Beacon Pointe Advisors LLC purchased a new position in LegalZoom.com in the 4th quarter worth about $2,051,000. Finally, EP Wealth Advisors LLC bought a new stake in LegalZoom.com during the 4th quarter valued at about $429,000. 81.99% of the stock is currently owned by institutional investors.

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.

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