LegalZoom.com (NASDAQ:LZ) Trading Down 7.4% - Here's Why

Key Points

• LegalZoom.com shares fell 7.4% after trading at a low of $5.70, well below the prior close of $6.16, on volume far below average.
• Recent analyst moves have been mixed but cautious: several firms cut price targets or ratings, and the stock now carries an average Hold rating with a consensus target price of $9.25.
• The company reported Q1 earnings of $0.12 per share, missing estimates by a penny, while revenue rose 12.9% year over year to $206.78 million; CEO Jeffrey M. Stibel also bought 125,000 shares in May.

LegalZoom.com, Inc. (NASDAQ:LZ - Get Free Report)'s share price was down 7.4% during trading on Wednesday . The stock traded as low as $5.70 and last traded at $5.7070. Approximately 182,839 shares changed hands during mid-day trading, a decline of 94% from the average daily volume of 3,236,018 shares. The stock had previously closed at $6.16.

Wall Street Analysts Forecast Growth

Several analysts have recently weighed in on the company. Zacks Research raised LegalZoom.com from a "strong sell" rating to a "hold" rating in a report on Monday, February 23rd. JPMorgan Chase & Co. reduced 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. Barclays reiterated an "underweight" rating and set a $6.00 price target (down from $9.00) on shares of LegalZoom.com in a research note on Wednesday, March 4th. Weiss Ratings lowered shares of LegalZoom.com from a "hold (c-)" rating to a "sell (d+)" rating in a report on Monday, April 6th. Finally, UBS Group dropped their price objective on shares of LegalZoom.com from $8.00 to $7.00 and set a "neutral" rating for the company in a research note on Thursday, May 7th. Three analysts have rated the stock with a Buy rating, four have given a Hold rating and three have issued a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Hold" and a consensus target price of $9.25.

LegalZoom.com Stock Performance

The firm has a 50 day moving average price of $6.21 and a two-hundred day moving average price of $8.13. The company has a market capitalization of $1.01 billion, a P/E ratio of 97.77, a price-to-earnings-growth ratio of 1.26 and a beta of 1.33.

LegalZoom.com (NASDAQ:LZ - Get Free Report) last posted its earnings results on Wednesday, May 6th. The company reported $0.12 EPS for the quarter, missing the consensus estimate of $0.13 by ($0.01). LegalZoom.com had a return on equity of 11.53% and a net margin of 1.46%.The company had revenue of $206.78 million for the quarter, compared to the consensus estimate of $202.14 million. During the same quarter last year, the business earned $0.13 EPS. LegalZoom.com's quarterly revenue was up 12.9% compared to the same quarter last year. On average, equities analysts expect that LegalZoom.com, Inc. will post 0.27 earnings per share for the current year.

LegalZoom.com announced that its Board of Directors has initiated a share repurchase program on Thursday, February 19th that permits the company to buyback $100.00 million in shares. This buyback authorization permits the company to buy up to 8.1% of its stock through open market purchases. Stock buyback programs are generally a sign that the company's leadership believes its stock is undervalued.

Insider Buying and Selling at LegalZoom.com

In other news, CEO Jeffrey M. Stibel acquired 125,000 shares of the firm's stock in a transaction on Monday, May 11th. The shares were purchased at an average cost of $6.15 per share, with a total value of $768,750.00. Following the completion of the purchase, the chief executive officer owned 2,955,609 shares of the company's stock, valued at $18,176,995.35. This represents a 4.42% increase in their ownership of the stock. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Nicole Miller sold 23,325 shares of the firm's stock in a transaction that occurred on Thursday, February 26th. The stock was sold at an average price of $6.63, for a total transaction of $154,644.75. Following the sale, the insider directly owned 813,033 shares of the company's stock, valued at approximately $5,390,408.79. The trade was a 2.79% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Company insiders own 5.90% of the company's stock.

Institutional Investors Weigh In On LegalZoom.com

A number of hedge funds and other institutional investors have recently bought and sold shares of LZ. Goldman Sachs Group Inc. raised its holdings in shares of LegalZoom.com by 165.3% in the fourth quarter. Goldman Sachs Group Inc. now owns 3,730,487 shares of the company's stock valued at $37,044,000 after buying an additional 2,324,481 shares during the last quarter. Boston Partners acquired a new stake in LegalZoom.com in the 3rd quarter valued at about $20,686,000. Neumeier Poma Investment Counsel LLC acquired a new stake in LegalZoom.com in the 3rd quarter valued at about $18,106,000. Qube Research & Technologies Ltd raised its stake in shares of LegalZoom.com by 180.5% in the second quarter. Qube Research & Technologies Ltd now owns 1,797,252 shares of the company's stock worth $16,014,000 after acquiring an additional 1,156,462 shares during the last quarter. Finally, Norges Bank bought a new position in shares of LegalZoom.com in the fourth quarter worth about $10,526,000. 81.99% of the stock is owned by institutional investors and hedge funds.

LegalZoom.com Company Profile

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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