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Investing.com - William Blair upgraded LegalZoom.com Inc (NASDAQ:LZ) from Market Perform to Outperform on Thursday. The stock, currently trading at $10.18, has shown strong momentum with a 35.5% gain year-to-date and nearly 40% over the past six months. According to InvestingPro data, LegalZoom appears undervalued based on Fair Value estimates.
The upgrade follows what the firm described as "an impressive beat-and-raise" quarterly report from the legal services company, which showed accelerating organic revenue growth for the second consecutive quarter. LegalZoom reported $705.9 million in revenue over the last twelve months, with a healthy 4.2% growth rate.
William Blair noted that LegalZoom has achieved three straight quarters of accelerating subscription revenue growth since the firm resumed coverage of the company in September 2024.
The research firm highlighted that LegalZoom has consistently expanded margins while investing in various growth initiatives, generating record free cash flow in the most recent quarter. The company maintains a strong 65.7% gross profit margin and has generated $130.8 million in levered free cash flow over the last twelve months.
William Blair cited improved clarity on previous concerns including management strategy, formation volatility, growth visibility, and AI-related disruption, along with a valuation of 10 times the firm’s 2026 EBITDA estimate, as factors supporting the more positive outlook. InvestingPro analysis shows LegalZoom has a "GOOD" overall financial health rating, with particularly strong scores in growth and profitability metrics. For deeper insights and a comprehensive Pro Research Report on LegalZoom, visit the stock’s page on InvestingPro.
In other recent news, LegalZoom.com Inc. reported its third-quarter earnings for 2025, revealing a strong financial performance. The company’s revenue surpassed expectations, highlighting a positive development for investors. However, earnings per share (EPS) did not meet projections, indicating a mixed outcome for the quarter. These earnings results are among the key updates for the company. Additionally, analysts and investors are closely watching these developments to assess the company’s future performance. As these are recent developments, they provide insight into LegalZoom’s current financial standing. The company continues to be a focal point for market analysts and investors.
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