LegalZoom.com (NASDAQ:LZ) Stock Price Down 8.8% After Analyst Downgrade

LegalZoom.com, Inc. (NASDAQ:LZ)’s stock price fell 8.8% on Friday after JPMorgan Chase & Co. lowered their price target on the stock from $7.00 to $6.00. JPMorgan Chase & Co. currently has a neutral rating on the stock. LegalZoom.com traded as low as $5.46 and last traded at $5.4250. 900,471 shares were traded during mid-day trading, a decline of 70% from the average daily volume of 2,986,663 shares. The stock had previously closed at $5.95.

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

Insider Buying and Selling at LegalZoom.com

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

Key Stories Impacting LegalZoom.com

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

• Positive Sentiment: Third-quarter revenue was $195.15 million, slightly above the $193.83 million consensus and up 2.6% year over year. EPS of $0.19 met the reported consensus, and profit increased from $0.17 a year earlier. Quarterly earnings results
• Neutral Sentiment: LegalZoom forecast $180 million to $185 million in adjusted EBITDA for fiscal 2026, while noting pressure from search and planned investments. Fiscal 2026 EBITDA outlook
• Negative Sentiment: Business-formation volume fell 13% year over year to 110,000, a demand concern. Human-in-the-loop subscriptions contributed 49% of third-quarter revenue, but did not offset the formation decline. Long-term investor takeaways
• Negative Sentiment: Bank of America cut its rating from “buy” to “underperform.” JPMorgan lowered its price target from $7 to $6 and assigned a “neutral” rating, signaling reduced analyst confidence. Bank of America rating information JPMorgan rating information
• Negative Sentiment: The stock crossed below its 200-day moving average following the downgrade, a technical signal that may add to near-term selling pressure. Stock crosses below 200-day moving average

Institutional Inflows and Outflows

A number of institutional investors have recently modified their holdings of the stock. Squarepoint Ops LLC raised its stake in shares of LegalZoom.com by 289.3% during the second quarter. Squarepoint Ops LLC now owns 269,974 shares of the company’s stock worth $1,655,000 after purchasing an additional 200,618 shares during the last quarter. Bank of America Corp DE lifted its holdings in shares of LegalZoom.com by 187.4% during the first quarter. Bank of America Corp DE now owns 2,509,891 shares of the company’s stock worth $14,231,000 after purchasing an additional 1,636,487 shares during the period. Pacer Advisors Inc. grew its position in LegalZoom.com by 53.6% in the 1st quarter. Pacer Advisors Inc. now owns 926,425 shares of the company’s stock valued at $5,253,000 after buying an additional 323,201 shares during the last quarter. Walleye Capital LLC grew its position in LegalZoom.com by 172.5% in the 1st quarter. Walleye Capital LLC now owns 354,031 shares of the company’s stock valued at $2,007,000 after buying an additional 224,100 shares during the last quarter. Finally, Healthcare of Ontario Pension Plan Trust Fund purchased a new position in LegalZoom.com in the 1st quarter valued at $1,923,000. Institutional investors and hedge funds own 81.99% of the company’s stock.

LegalZoom.com Trading Down 8.8%

The company has a market capitalization of $929.11 million, a price-to-earnings ratio of 45.30, a PEG ratio of 1.30 and a beta of 1.16. The firm’s 50 day simple moving average is $6.16 and its 200-day simple moving average is $6.52.

LegalZoom.com (NASDAQ:LZ) last announced its quarterly earnings data on Wednesday, November 4th. The company reported $0.19 EPS for the quarter, hitting analysts’ consensus estimates of $0.19. LegalZoom.com had a net margin of 2.56% and a return on equity of 23.09%. The company had revenue of $195.15 million during the quarter, compared to the consensus estimate of $193.83 million. During the same quarter in the prior year, the firm earned $0.17 EPS. LegalZoom.com’s quarterly revenue was up 2.6% on a year-over-year basis. As a group, sell-side analysts forecast that LegalZoom.com, Inc. will post 0.32 EPS for the current fiscal 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.