LegalZoom.com (NASDAQ:LZ) Stock Price Crosses Below 200 Day Moving Average on Analyst Downgrade

Key Points

• LegalZoom shares fell below their 200-day moving average, trading as low as $5.10 and last at $5.95, after JPMorgan cut its price target from $7 to $6 while maintaining a neutral rating.
• Analyst sentiment is cautious: MarketBeat reports an average “Reduce” rating and a $7.10 average price target; Bank of America also downgraded the stock to “underperform.”
• Third-quarter revenue rose 2.6% year over year to $195.15 million, beating consensus, while EPS of $0.19 matched estimates. However, business formation volume declined 13% year over year, highlighting softness in a key business area.

LegalZoom.com, Inc. (NASDAQ:LZ - Get Free Report)'s share price passed below its two hundred day moving average during trading on Thursday after JPMorgan Chase & Co. lowered their price target on the stock from $7.00 to $6.00. The stock has a two hundred day moving average of $6.52 and traded as low as $5.10. JPMorgan Chase & Co. currently has a neutral rating on the stock. LegalZoom.com shares last traded at $5.95, with a volume of 5,335,565 shares.

Several other equities analysts have also recently commented on LZ. Wall Street Zen upgraded shares of LegalZoom.com from a "hold" rating to a "buy" rating in a research note on Saturday, September 26th. Bank of America lowered shares of LegalZoom.com from a "buy" rating to an "underperform" rating in a research report on Thursday. William Blair downgraded shares of LegalZoom.com from an "outperform" rating to a "market perform" rating in a report on Thursday, August 6th. Finally, Weiss Ratings lowered shares of LegalZoom.com from a "hold (c-)" rating to a "sell (d+)" rating in a research report on Thursday, October 29th. Five analysts have rated the stock with a Hold rating and four have issued a Sell rating to the stock. According to data from MarketBeat.com, the company presently has an average rating of "Reduce" and an average price target of $7.10.

Insiders Place Their Bets

In other news, insider Nicole Miller sold 33,479 shares of the 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 directly owned 943,453 shares of the company's stock, valued at approximately $5,198,426.03. This represents a 3.43% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. 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. Also, CFO Noel Watson sold 83,629 shares of the stock in a transaction 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 owned 1,407,801 shares of the company's stock, valued at $8,207,479.83. This represents a 5.61% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 577,475 shares of company stock worth $3,375,197 in the last quarter. Corporate insiders own 7.40% of the company's stock.

Trending Headlines about 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

Institutional Trading of LegalZoom.com

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the company. State Street Corp grew its stake in shares of LegalZoom.com by 3.0% in the second quarter. State Street Corp now owns 4,552,468 shares of the company's stock worth $27,907,000 after purchasing an additional 132,761 shares during the last quarter. Dimensional Fund Advisors LP increased its holdings in LegalZoom.com by 3.0% in the first quarter. Dimensional Fund Advisors LP now owns 3,112,895 shares of the company's stock worth $17,650,000 after purchasing an additional 91,131 shares in the last quarter. Punch & Associates Investment Management Inc. increased its stake in shares of LegalZoom.com by 6.0% in the 2nd quarter. Punch & Associates Investment Management Inc. now owns 2,850,501 shares of the company's stock valued at $17,474,000 after acquiring an additional 161,231 shares in the last quarter. Bank of America Corp DE increased its stake in LegalZoom.com by 187.4% in the first quarter. Bank of America Corp DE now owns 2,509,891 shares of the company's stock valued at $14,231,000 after purchasing an additional 1,636,487 shares in the last quarter. Finally, Principal Financial Group Inc. raised its holdings in shares of LegalZoom.com by 579.1% during the first quarter. Principal Financial Group Inc. now owns 1,010,914 shares of the company's stock valued at $5,732,000 after purchasing an additional 862,045 shares during the period. 81.99% of the stock is currently owned by institutional investors and hedge funds.

LegalZoom.com Price Performance

The firm's fifty day moving average price is $6.16 and its two-hundred day moving average price is $6.52. The stock has a market cap of $1.02 billion, a price-to-earnings ratio of 49.59, a price-to-earnings-growth ratio of 1.30 and a beta of 1.16.

LegalZoom.com (NASDAQ:LZ - Get Free Report) last issued its earnings results on Wednesday, November 4th. The company reported $0.19 EPS for the quarter, meeting the consensus estimate of $0.19. The company had revenue of $195.15 million during the quarter, compared to the consensus estimate of $193.83 million. LegalZoom.com had a return on equity of 23.09% and a net margin of 2.56%. The firm's revenue for the quarter was up 2.6% compared to the same quarter last year. During the same period last year, the business posted $0.17 EPS. On average, equities research analysts anticipate that LegalZoom.com, Inc. will post 0.32 earnings per share for the current year.

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.

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.