📊 LZ Key Takeaways
Is Legalzoom.com, Inc.. (LZ) a Good Investment?
LegalZoom demonstrates solid revenue growth (10.9% YoY) and strong free cash flow generation (19.6% FCF margin with $147.9M absolute), supported by a clean balance sheet with no debt and $203.1M in cash. However, profitability remains challenged with a 2.0% net margin and stagnant net income growth (0.0% YoY), while a concerning current ratio of 0.76x suggests potential near-term liquidity pressures despite healthy operating cash flows.
LegalZoom shows solid top-line growth, strong gross margins, and excellent free cash flow generation, supported by a debt-free balance sheet and a large cash position. However, the quality of earnings is mixed because operating and net margins remain thin, net income was flat, and diluted EPS fell sharply, indicating limited operating leverage and potential dilution or higher cost pressure.
Why Buy Legalzoom.com, Inc.. Stock? LZ Key Strengths
- Strong free cash flow generation of $147.9M with 19.6% FCF margin, indicating cash conversion efficiency
- Robust revenue growth of 10.9% YoY reaching $756.0M in a competitive legal services market
- Zero long-term debt and excellent interest coverage ratio of 409.4x, providing financial flexibility
- Healthy gross margin of 65.9% demonstrates pricing power and cost structure efficiency
- Revenue grew 10.9% year over year with a strong 65.9% gross margin
- Free cash flow is robust at $147.92M, equal to a 19.6% FCF margin
- Balance sheet risk is low with $203.10M in cash and no long-term debt
LZ Stock Risks: Legalzoom.com, Inc.. Investment Risks
- Weak current ratio of 0.76x indicates liquidity constraint despite cash-rich position, suggesting working capital management issues
- Profitability stagnation with net income flat YoY and declining diluted EPS (-50.0% YoY), raising concerns about operational leverage
- Low operating margin of 3.3% and net margin of 2.0% indicate thin profit generation relative to revenue scale
- Modest returns on equity (9.0%) and assets (3.0%) suggest inefficient capital deployment relative to shareholder expectations
- Operating margin of 3.3% and net margin of 2.0% leave little buffer if costs rise or growth slows
- Net income was flat and diluted EPS declined 50.0%, suggesting weak earnings conversion for shareholders
- Current and quick ratios of 0.76x indicate tight short-term liquidity despite the cash balance
Key Metrics to Watch
- Operating margin trend and path to 5%+ profitability improvement
- Working capital efficiency and current ratio improvement toward 1.0x or above
- Revenue growth sustainability and customer acquisition cost (CAC) payback period
- Free cash flow consistency and deployment strategy for $203.1M cash balance
- Operating margin expansion and net income growth
- Diluted EPS trend versus free cash flow and revenue growth
Legalzoom.com, Inc.. (LZ) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
LZ Profit Margin, ROE & Profitability Analysis
LZ vs Technology Sector: How Legalzoom.com, Inc.. Compares
How Legalzoom.com, Inc.. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Legalzoom.com, Inc.. Stock Overvalued? LZ Valuation Analysis 2026
Based on fundamental analysis, Legalzoom.com, Inc.. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Legalzoom.com, Inc.. Balance Sheet: LZ Debt, Cash & Liquidity
LZ Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Legalzoom.com, Inc..'s revenue has grown significantly by 31% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.07 reflects profitable operations.
LZ Revenue Growth, EPS Growth & YoY Performance
LZ Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $168.6M | -$266.0K | $0.02 |
| Q2 2025 | $177.4M | -$266.0K | $0.00 |
| Q1 2025 | $174.2M | $4.7M | $0.02 |
| Q3 2024 | $167.3M | $1.3M | $0.03 |
| Q2 2024 | $168.9M | -$963.0K | $-0.01 |
| Q1 2024 | $165.9M | -$2.4M | $-0.01 |
| Q3 2023 | $155.3M | $1.4M | $0.03 |
| Q2 2023 | $162.6M | -$963.0K | $-0.01 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Legalzoom.com, Inc.. Dividends, Buybacks & Capital Allocation
LZ SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Legalzoom.com, Inc.. (CIK: 0001286139)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| Mar 10, 2026 | 4 | xslF345X05/wk-form4_1773180092.xml | View → |
| Mar 10, 2026 | 4 | xslF345X05/wk-form4_1773180086.xml | View → |
| Mar 10, 2026 | 4 | xslF345X05/wk-form4_1773180081.xml | View → |
| Mar 10, 2026 | 4 | xslF345X05/wk-form4_1773180075.xml | View → |
| Feb 27, 2026 | 4 | xslF345X05/wk-form4_1772234917.xml | View → |
❓ Frequently Asked Questions about LZ
What is the AI rating for LZ?
Legalzoom.com, Inc.. (LZ) has a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 70% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are LZ's key strengths?
Claude: Strong free cash flow generation of $147.9M with 19.6% FCF margin, indicating cash conversion efficiency. Robust revenue growth of 10.9% YoY reaching $756.0M in a competitive legal services market. ChatGPT: Revenue grew 10.9% year over year with a strong 65.9% gross margin. Free cash flow is robust at $147.92M, equal to a 19.6% FCF margin.
What are the risks of investing in LZ?
Claude: Weak current ratio of 0.76x indicates liquidity constraint despite cash-rich position, suggesting working capital management issues. Profitability stagnation with net income flat YoY and declining diluted EPS (-50.0% YoY), raising concerns about operational leverage. ChatGPT: Operating margin of 3.3% and net margin of 2.0% leave little buffer if costs rise or growth slows. Net income was flat and diluted EPS declined 50.0%, suggesting weak earnings conversion for shareholders.
What is LZ's revenue and growth?
Legalzoom.com, Inc.. reported revenue of $756.0M.
Does LZ pay dividends?
Legalzoom.com, Inc.. does not currently pay dividends.
Where can I find LZ SEC filings?
Official SEC filings for Legalzoom.com, Inc.. (CIK: 0001286139) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is LZ's EPS?
Legalzoom.com, Inc.. has a diluted EPS of $0.08.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is LZ a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Legalzoom.com, Inc.. has a HOLD rating with 70% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is LZ stock overvalued or undervalued?
Valuation metrics for LZ: ROE of 9.0% (sector avg: 22%), net margin of 2.0% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
Should I buy LZ stock in 2026?
Our dual AI analysis gives Legalzoom.com, Inc.. a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is LZ's free cash flow?
Legalzoom.com, Inc..'s operating cash flow is $178.2M, with capital expenditures of $30.3M. FCF margin is 19.6%.
How does LZ compare to other Technology stocks?
Vs Technology sector averages: Net margin 2.0% (avg: 18%), ROE 9.0% (avg: 22%), current ratio 0.76 (avg: 2.5).