LegalZoom.com (NASDAQ:LZ) Stock Price Down 5% - What's Next?

Key Points

• LegalZoom shares fell 5% to about $6.71, with trading volume substantially below average. The stock has a market capitalization of approximately $1.16 billion.
• Analyst sentiment remains cautious: six analysts rate the stock “Hold” and two rate it “Sell,” producing an average “Reduce” rating and a $7.30 price target. Recent ratings included a JPMorgan price-target cut to $7.00.
• LegalZoom slightly exceeded quarterly EPS expectations, reporting $0.16 versus a $0.15 consensus estimate, while revenue rose 6.6% year over year but came in just below forecasts. Insiders sold roughly 577,475 shares over the past 90 days, while institutional investors own nearly 82% of the stock.

LegalZoom.com, Inc. (NASDAQ:LZ - Get Free Report) shares traded down 5% during trading on Tuesday. The company traded as low as $6.74 and last traded at $6.7080. Approximately 564,248 shares traded hands during trading, a decline of 81% from the average session volume of 2,995,958 shares. The stock had previously closed at $7.06.

Wall Street Analysts Forecast Growth

Several analysts have recently weighed in on LZ shares. Wall Street Zen upgraded LegalZoom.com from a "hold" rating to a "buy" rating in a report on Saturday, September 26th. Weiss Ratings raised LegalZoom.com from a "sell (d+)" rating to a "hold (c-)" rating in a research report on Wednesday, October 14th. William Blair downgraded shares of LegalZoom.com from an "outperform" rating to a "market perform" rating in a research report on Thursday, August 6th. Finally, JPMorgan Chase & Co. reaffirmed a "neutral" rating and set a $7.00 price objective (down from $8.00) on shares of LegalZoom.com in a research report on Thursday, August 6th. Six research analysts have rated the stock with a Hold rating and two have issued a Sell rating to the company's stock. According to data from MarketBeat.com, the company presently has an average rating of "Reduce" and an average target price of $7.30.

LegalZoom.com Price Performance

The stock has a market cap of $1.16 billion, a price-to-earnings ratio of 74.72, a P/E/G ratio of 1.31 and a beta of 1.20. The stock's 50 day simple moving average is $6.03 and its two-hundred day simple moving average is $6.65.

LegalZoom.com (NASDAQ:LZ - Get Free Report) last posted its quarterly earnings results on Wednesday, August 5th. The company reported $0.16 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.15 by $0.01. The firm had revenue of $205.29 million during the quarter, compared to analyst estimates of $205.83 million. LegalZoom.com had a net margin of 2.13% and a return on equity of 15.83%. The company's quarterly revenue was up 6.6% compared to the same quarter last year. During the same quarter in the prior year, the business posted $0.15 earnings per share. As a group, analysts predict that LegalZoom.com, Inc. will post 0.32 earnings per share for the current year.

Insider Transactions at LegalZoom.com

In other LegalZoom.com news, CFO Noel Watson sold 416,371 shares of the company's stock in a transaction dated Thursday, August 20th. The shares were sold at an average price of $5.91, for a total transaction of $2,460,752.61. Following the sale, the chief financial officer directly owned 1,491,430 shares of the company's stock, valued at approximately $8,814,351.30. This represents a 21.82% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, insider Nicole Miller sold 43,996 shares of the stock in a transaction on Monday, August 17th. The stock was sold at an average price of $5.51, for a total value of $242,417.96. Following the sale, the insider owned 976,932 shares in the company, valued at $5,382,895.32. The trade was a 4.31% decrease in their position. The disclosure for this sale is available in the SEC filing. 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. Over the last 90 days, insiders sold 577,475 shares of company stock worth $3,375,197. Company insiders own 7.40% of the company's stock.

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. Bank of America Corp DE grew its holdings in LegalZoom.com by 187.4% during the 1st quarter. Bank of America Corp DE now owns 2,509,891 shares of the company's stock worth $14,231,000 after acquiring an additional 1,636,487 shares during the period. Principal Financial Group Inc. raised its position 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 worth $5,732,000 after purchasing an additional 862,045 shares during the period. Empowered Funds LLC bought a new position in LegalZoom.com in the first quarter valued at approximately $2,918,000. Healthcare of Ontario Pension Plan Trust Fund acquired a new position in LegalZoom.com in the 1st quarter worth $1,923,000. Finally, SEB Asset Management AB bought a new position in shares of LegalZoom.com during the first quarter worth about $1,881,000. 81.99% of the stock is currently owned by institutional investors and hedge funds.

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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