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Investing.com - Citizens JMP has reiterated its Market Perform rating on LegalZoom.com Inc (NASDAQ:LZ), according to a research note published Friday. The company, currently valued at $1.9 billion, has demonstrated strong performance with a 40.48% year-to-date return and maintains impressive gross profit margins of 65.71%.
The firm acknowledged LegalZoom’s strategic positioning in the legal services market, noting that approximately one-third of business formation customers use LegalZoom as their first service provider. InvestingPro analysis reveals the company holds more cash than debt on its balance sheet, with strong cash flows sufficiently covering interest payments.
Citizens JMP highlighted the company’s brand awareness advantage, which it described as approximately five times greater than any competitor in the space.
The research firm expressed concerns about LegalZoom’s shift away from its freemium strategy, suggesting that sustained growth will depend on continued product differentiation to justify premium pricing.
Citizens JMP analysts pointed to "early signs of pressure" in this area, citing recent declines in website traffic share, and indicated they would maintain their neutral stance until seeing "further evidence that growth can be maintained."
In other recent news, LegalZoom.com Inc. reported a notable acceleration in subscription growth, with UBS highlighting a 22% increase in the second quarter of 2025. This growth has prompted UBS to raise its price target for LegalZoom to $12.00, maintaining a Neutral rating. Similarly, BofA Securities upgraded its rating on LegalZoom from Underperform to Buy, boosting its price target from $8.00 to $12.00, citing the company’s successful shift toward subscription-based services and new artificial intelligence collaborations. Meanwhile, JPMorgan has reiterated its Overweight rating and $12.00 price target following LegalZoom’s recent earnings report.
In a strategic move, LegalZoom has expanded its intellectual property services to include patent filings through LZ Legal Services, offering attorney-assisted provisional patent applications. This new service aims to help businesses and inventors protect their innovations at a fraction of traditional costs. Despite competitive pressures, JMP Securities maintains a Market Perform rating on LegalZoom, acknowledging the company’s strong brand position and significant market presence. LegalZoom continues to serve as the first service for approximately one-third of its business formation customers.
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