Critical Analysis: LegalZoom.com (LZ) versus Its Competitors

LegalZoom.com (NASDAQ:LZGet Rating) is one of 141 public companies in the “Data processing & preparation” industry, but how does it compare to its peers? We will compare LegalZoom.com to similar businesses based on the strength of its analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.

Profitability

This table compares LegalZoom.com and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LegalZoom.com -21.77% -1,446.94% -29.38%
LegalZoom.com Competitors -37.87% -1,419.98% -5.84%

Valuation and Earnings

This table compares LegalZoom.com and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
LegalZoom.com $575.08 million -$108.66 million -13.70
LegalZoom.com Competitors $895.99 million -$10.28 million 2.80

LegalZoom.com’s peers have higher revenue and earnings than LegalZoom.com. LegalZoom.com is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Institutional and Insider Ownership

51.2% of LegalZoom.com shares are owned by institutional investors. Comparatively, 52.3% of shares of all “Data processing & preparation” companies are owned by institutional investors. 18.8% of shares of all “Data processing & preparation” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings for LegalZoom.com and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LegalZoom.com 0 4 6 0 2.60
LegalZoom.com Competitors 778 3345 5040 106 2.48

LegalZoom.com currently has a consensus target price of $26.25, suggesting a potential upside of 150.72%. As a group, “Data processing & preparation” companies have a potential upside of 78.22%. Given LegalZoom.com’s stronger consensus rating and higher probable upside, equities research analysts plainly believe LegalZoom.com is more favorable than its peers.

Summary

LegalZoom.com peers beat LegalZoom.com on 8 of the 12 factors compared.

LegalZoom.com Company Profile (Get Rating)

LegalZoom.com, Inc. operates an online platform for legal and compliance solutions in the United States. The company's platform offers products and services, including business formations, creating estate planning documents, protecting intellectual property, completing certain forms and agreements, providing access to independent attorney advice, and connecting customers with experts for tax preparation and bookkeeping services. It serves small businesses and individuals. LegalZoom.com, Inc. was incorporated in 1999 and is headquartered in Glendale, California.

Receive News & Ratings for LegalZoom.com Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for LegalZoom.com and related companies with MarketBeat.com's FREE daily email newsletter.