LegalZoom.com Inc. Common Stock (LZ)

FairStock Score: 26/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach LegalZoom as a Graham-style bargain hunter and a Buffett-style student of durable economics. It operates an online platform for legal, compliance, and business formation needs, mostly for small businesses and consumers. Revenue has grown from $660.7 million in fiscal year 2023 to $681.9 million in fiscal year 2024 and $756.0 million in fiscal year 2025. Yet profits are uneven: fiscal year 2024 net income was $30.0 million, while fiscal year 2025 net income fell to $15.4 million. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $205.3 million and net income was $5.2 million, a 2.52% margin. That is not a wide-moat earnings stream. The balance sheet shows low debt with D/E 0.12, and trailing free cash flow is $149.7 million, an FCF yield of 14.4% on the $1.0 billion market cap. That cash generation is attractive. But the FairStock valuation metrics at the 2026-10-13 close of $6.05 are demanding: P/E 67.22, P/B 7.96, Graham Number $1.24, margin of safety -387.90%, and ROCE 4.23%. The Piotroski F-Score of 7/9 is encouraging, but Altman Z-Score of -1.58 signals caution. Lynch category is TURNAROUND because it returned to profit after a loss within three years. Turnarounds can pay, but only if margins and revenue growth become durable. At this price, I see a modest business with real cash flow but little Graham-style protection. I would want proof that margins can expand and that the cash flow is sustainable before calling it a bargain.

In plain English: LegalZoom helps people and small businesses make legal documents and filings online. It is profitable again and produces a lot of cash, but profits are thin and the stock price looks high compared with its earnings and accounting value. The price seems to already reflect hopes that its recent return to profit will last.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer