LegalZoom.com (NASDAQ:LZ) Stock Price Down 5.8% on Disappointing Earnings

Shares of LegalZoom.com, Inc. (NASDAQ:LZ) traded down 5.8% on Friday following a dissappointing earnings announcement. The stock traded as low as $6.57 and last traded at $6.6430. 1,976,159 shares changed hands during mid-day trading, a decline of 48% from the average session volume of 3,818,944 shares. The stock had previously closed at $7.05.

The company reported $0.17 EPS for the quarter, missing the consensus estimate of $0.18 by ($0.01). LegalZoom.com had a net margin of 2.04% and a return on equity of 6.17%. The business 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 company earned $0.19 EPS. LegalZoom.com’s revenue for the quarter was up 17.7% compared to the same quarter last year.

LegalZoom.com declared that its Board of Directors has approved a share buyback plan on Thursday, February 19th that allows the company to repurchase $100.00 million in shares. This repurchase authorization allows the company to buy up to 8.1% of its shares through open market purchases. Shares repurchase plans are generally an indication that the company’s management believes its shares are undervalued.

LegalZoom.com News Summary

Here are the key news stories impacting LegalZoom.com this week:

• Positive Sentiment: Q4 & full‑year results showed revenue and cash‑flow strength (Q4 revenue $190.3M vs. $184.9M est.; full‑year revenue +11%; record operating cash flow and free cash flow; $203.1M cash, no debt). GlobeNewswire: Press Release
• Positive Sentiment: Board authorized a $100M share repurchase (represents ~8.1% of shares), a tangible capital‑return action that typically supports the share price. RTT News: Buyback
• Neutral Sentiment: Results were mixed: EPS missed by $0.01 (reported $0.17 vs. $0.18 consensus) even as revenue grew ~17.7% YoY; margins and earnings leverage remain watch points. MarketBeat: Earnings
• Neutral Sentiment: Guidance: FY‑2026 revenue $805M–$825M (around or slightly above consensus) and Q1 revenue guide in line — supports top‑line continuation but investors will watch execution. GlobeNewswire: Guidance
• Negative Sentiment: Analyst downgrades and PT cuts pressured sentiment: UBS cut its PT from $12 to $8 and moved to Neutral; other banks (JPMorgan coverage noted) have similarly become more cautious. Analyst tone likely amplified selling. Benzinga: UBS PT Cut AmericanBankingNews: JPMorgan Note
• Negative Sentiment: Insider selling: CFO Noel Watson sold 15,000 shares (~$104K) last week; while small vs. his holdings, exec sales can create near‑term headline pressure. SEC Form 4

Analyst Ratings Changes

LZ has been the subject of a number of analyst reports. Wall Street Zen downgraded LegalZoom.com from a “strong-buy” rating to a “buy” rating in a research report on Saturday, November 1st. UBS Group reduced their target price on shares of LegalZoom.com from $12.00 to $8.00 and set a “neutral” rating on the stock in a research note on Friday. Barclays raised their target price on shares of LegalZoom.com from $10.00 to $12.00 and gave the stock an “equal weight” rating in a report on Thursday, November 6th. Citigroup cut their price target on shares of LegalZoom.com from $12.00 to $10.50 and set a “neutral” rating on the stock in a report on Friday, November 21st. Finally, Morgan Stanley increased their price objective on shares of LegalZoom.com from $8.50 to $9.00 and gave the stock an “underweight” rating in a research report on Thursday, November 13th. Three 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 currently has an average rating of “Hold” and a consensus price target of $10.42.

Insider Transactions at LegalZoom.com

In other LegalZoom.com news, CFO Noel Bertram Watson sold 15,000 shares of the company’s stock in a transaction dated Wednesday, February 18th. The shares were sold at an average price of $6.96, for a total value of $104,400.00. Following the transaction, the chief financial officer directly owned 1,480,860 shares in the company, valued at $10,306,785.60. This represents a 1.00% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. 5.90% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On LegalZoom.com

Hedge funds have recently modified their holdings of the business. Exchange Traded Concepts LLC bought a new position in LegalZoom.com in the third quarter worth approximately $34,000. Parkside Financial Bank & Trust bought a new position in shares of LegalZoom.com in the 3rd quarter worth $40,000. Clearstead Advisors LLC raised its position in shares of LegalZoom.com by 58.5% in the 3rd quarter. Clearstead Advisors LLC now owns 3,906 shares of the company’s stock worth $41,000 after acquiring an additional 1,441 shares in the last quarter. Osaic Holdings Inc. lifted its stake in shares of LegalZoom.com by 477.3% during the 2nd quarter. Osaic Holdings Inc. now owns 4,555 shares of the company’s stock worth $41,000 after purchasing an additional 3,766 shares during the last quarter. Finally, EverSource Wealth Advisors LLC boosted its position in LegalZoom.com by 976.4% during the second quarter. EverSource Wealth Advisors LLC now owns 4,564 shares of the company’s stock valued at $41,000 after purchasing an additional 4,140 shares in the last quarter. Hedge funds and other institutional investors own 81.99% of the company’s stock.

LegalZoom.com Stock Down 7.0%

The company has a market cap of $1.16 billion, a PE ratio of 82.01, a price-to-earnings-growth ratio of 1.12 and a beta of 1.22. The firm has a 50 day simple moving average of $8.99 and a 200-day simple moving average of $9.77.

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.