LegalZoom.com (NASDAQ:LZ) Shares Gap Down - Time to Sell?

Key Points

• Shares gapped down pre-market — the stock fell from a $9.12 close to an $8.17 open and last traded around $7.90 on volume of ~880,000, sitting below its 50‑ and 200‑day moving averages (~$9.61 and $9.95).
• Analyst sentiment is mixed with a consensus rating of Hold and a $11.50 price target (3 Buys, 4 Holds, 2 Sells); notable actions include Zacks cutting to "strong sell," William Blair upgrading to "outperform," and Barclays raising its target to $12.
• Latest quarter showed a missed EPS ($0.17 vs. $0.20 expected) but revenue beat ($190.2M vs. $183.3M, +12.8% YoY); valuation is elevated (P/E ~61.4, market cap ~$1.3B) and insiders recently sold shares (insiders own 5.9%).

LegalZoom.com, Inc. (NASDAQ:LZ - Get Free Report)'s stock price gapped down prior to trading on Tuesday . The stock had previously closed at $9.12, but opened at $8.17. LegalZoom.com shares last traded at $7.8950, with a volume of 880,002 shares.

Analyst Ratings Changes

Several brokerages recently weighed in on LZ. William Blair upgraded LegalZoom.com from a "market perform" rating to an "outperform" rating in a research note on Thursday, November 6th. Wall Street Zen downgraded shares of LegalZoom.com from a "strong-buy" rating to a "buy" rating in a report on Saturday, November 1st. Weiss Ratings reaffirmed a "hold (c)" rating on shares of LegalZoom.com in a report on Monday, December 29th. Zacks Research cut LegalZoom.com from a "hold" rating to a "strong sell" rating in a research note on Monday, January 19th. Finally, Barclays boosted their price target on shares of LegalZoom.com from $10.00 to $12.00 and gave the stock an "equal weight" rating in a research note on Thursday, November 6th. Three analysts have rated the stock with a Buy rating, four have given a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat.com, the stock has an average rating of "Hold" and a consensus price target of $11.50.

LegalZoom.com Price Performance

The company's 50-day moving average price is $9.61 and its two-hundred day moving average price is $9.95. The company has a market capitalization of $1.30 billion, a P/E ratio of 61.39, a price-to-earnings-growth ratio of 1.50 and a beta of 1.22.

LegalZoom.com (NASDAQ:LZ - Get Free Report) last issued its quarterly earnings results on Wednesday, November 5th. The company reported $0.17 EPS for the quarter, missing analysts' consensus estimates of $0.20 by ($0.03). The company had revenue of $190.16 million during the quarter, compared to the consensus estimate of $183.27 million. LegalZoom.com had a return on equity of 9.91% and a net margin of 3.05%.The firm's revenue for the quarter was up 12.8% on a year-over-year basis. During the same quarter in the previous year, the business posted $0.17 EPS. On average, analysts anticipate that LegalZoom.com, Inc. will post 0.25 earnings per share for the current fiscal year.

Insider Activity at LegalZoom.com

In related news, insider Nicole Miller sold 23,506 shares of LegalZoom.com stock in a transaction that occurred on Tuesday, November 18th. The stock was sold at an average price of $9.63, for a total transaction of $226,362.78. Following the transaction, the insider owned 868,627 shares of the company's stock, valued at $8,364,878.01. The trade was a 2.63% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, CFO Noel Bertram Watson sold 15,000 shares of the stock in a transaction dated Tuesday, November 18th. The shares were sold at an average price of $9.56, for a total transaction of $143,400.00. Following the completion of the sale, the chief financial officer owned 1,551,582 shares of the company's stock, valued at approximately $14,833,123.92. This trade represents a 0.96% decrease in their position. The disclosure for this sale is available in the SEC filing. Company insiders own 5.90% of the company's stock.

Institutional Investors Weigh In On LegalZoom.com

Institutional investors and hedge funds have recently bought and sold shares of the stock. Hussman Strategic Advisors Inc. bought a new stake in shares of LegalZoom.com in the 4th quarter valued at about $1,043,000. Strs Ohio grew its stake in LegalZoom.com by 7.0% in the fourth quarter. Strs Ohio now owns 73,600 shares of the company's stock worth $731,000 after purchasing an additional 4,800 shares during the period. UBS Group AG increased its stake in shares of LegalZoom.com by 87.9% in the 4th quarter. UBS Group AG now owns 613,537 shares of the company's stock worth $6,092,000 after acquiring an additional 287,063 shares in the last quarter. Universal Beteiligungs und Servicegesellschaft mbH lifted its holdings in shares of LegalZoom.com by 120.4% during the fourth quarter. Universal Beteiligungs und Servicegesellschaft mbH now owns 166,156 shares of the company's stock valued at $1,650,000 after purchasing an additional 90,762 shares during the last quarter. Finally, Round Rock Advisors LLC boosted its holdings in LegalZoom.com by 62.6% in the fourth quarter. Round Rock Advisors LLC now owns 159,579 shares of the company's stock worth $1,585,000 after acquiring an additional 61,447 shares in the last quarter. 81.99% of the stock is owned by hedge funds and other 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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.