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

LegalZoom.com, Inc. (NASDAQ:LZ) was down 5.8% on Friday following a weaker than expected earnings announcement. The company traded as low as $6.57 and last traded at $6.6430. Approximately 1,976,159 shares traded hands during trading, a decline of 48% from the average daily volume of 3,818,944 shares. The stock had previously closed at $7.05.

The company reported $0.17 earnings per share for the quarter, missing the consensus estimate of $0.18 by ($0.01). The business had revenue of $190.27 million for the quarter, compared to the consensus estimate of $184.85 million. LegalZoom.com had a return on equity of 6.17% and a net margin of 2.04%.The firm’s revenue for the quarter was up 17.7% compared to the same quarter last year. During the same quarter last year, the business posted $0.19 earnings per share.

LegalZoom.com declared that its Board of Directors has approved a share buyback program on Thursday, February 19th that authorizes the company to buyback $100.00 million in outstanding shares. This buyback authorization authorizes the company to repurchase up to 8.1% of its shares through open market purchases. Shares buyback programs are usually an indication that the company’s board believes its stock is undervalued.

Key Headlines Impacting LegalZoom.com

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 Upgrades and Downgrades

Several brokerages recently issued reports on LZ. Citigroup dropped their price objective on LegalZoom.com from $12.00 to $10.50 and set a “neutral” rating on the stock in a research note on Friday, November 21st. JPMorgan Chase & Co. lowered their target price on LegalZoom.com from $14.00 to $11.00 and set an “overweight” rating for the company in a report on Wednesday. Zacks Research lowered LegalZoom.com from a “hold” rating to a “strong sell” rating in a research note on Monday, January 19th. UBS Group decreased their price objective on LegalZoom.com from $12.00 to $8.00 and set a “neutral” rating for the company in a report on Friday. Finally, William Blair raised shares of LegalZoom.com from a “market perform” rating to an “outperform” rating in a research note on Thursday, November 6th. Three investment analysts have rated the stock with a Buy rating, five have issued a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat.com, LegalZoom.com presently has an average rating of “Hold” and a consensus target price of $10.42.

Insider Buying and Selling at LegalZoom.com

In related news, CFO Noel Bertram Watson sold 15,000 shares of the firm’s stock in a transaction dated Wednesday, February 18th. The stock was sold at an average price of $6.96, for a total transaction of $104,400.00. Following the sale, the chief financial officer owned 1,480,860 shares of the company’s stock, valued at $10,306,785.60. This trade represents a 1.00% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. 5.90% of the stock is owned by company insiders.

Institutional Trading of LegalZoom.com

Several hedge funds have recently modified their holdings of the company. Exchange Traded Concepts LLC purchased a new position in shares of LegalZoom.com in the 3rd quarter worth approximately $34,000. Parkside Financial Bank & Trust acquired a new stake in LegalZoom.com in the third quarter valued at approximately $40,000. Clearstead Advisors LLC grew its holdings in LegalZoom.com by 58.5% in the third quarter. Clearstead Advisors LLC now owns 3,906 shares of the company’s stock worth $41,000 after purchasing an additional 1,441 shares during the last quarter. Osaic Holdings Inc. grew its holdings in LegalZoom.com by 477.3% in the second 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 increased its position in shares of LegalZoom.com by 976.4% during the second quarter. EverSource Wealth Advisors LLC now owns 4,564 shares of the company’s stock worth $41,000 after purchasing an additional 4,140 shares in the last quarter. 81.99% of the stock is owned by hedge funds and other institutional investors.

LegalZoom.com Stock Performance

The stock has a market cap of $1.16 billion, a PE ratio of 82.01, a price-to-earnings-growth ratio of 1.20 and a beta of 1.22. The firm has a fifty day moving average price of $8.99 and a 200 day moving average price of $9.76.

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.