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Upturn AI Summary - About
LegalZoom.com Inc(LZ)
Advisory History & Simulated Performance *
*as per simulation (see disclosures)- ALL
- 1Y
- 1M
- 1W
- BUY Advisory
- SELL Advisory (Profit)
- SELL Advisory (Loss)
- Profit
- Loss
- PASS (Skip)
Stock price based on last close Advisory Performance History (Simulated)
Upturn Advisory & Investor View for LZ
11/06/2026: LZ (1-star) is a SELL. SELL for 1 day. Simulated Profits (-20.61%). Updated daily EoD!
LegalZoom.com Inc is a provider of online legal, compliance, and tax services primarily serving small businesses. The company has a leading position in the DIY formation market, supported by strong brand recognition that lowers its customer acquisition hurdles. Its core investment story revolves around transitioning users from one-time document filings to recurring, higher-margin subscription services. However, the company faces significant execution risks, including intense competition from AI-native tools and pressure on customer acquisition costs. Potential investors should monitor the company's ability to maintain revenue growth during periods of economic uncertainty and its success in scaling its subscription-based advisory platform.
How to Read the Upturn Advisory
The Upturn Star Rating and the current BUY, SELL, or PASS advisory are generated by Upturn’s AI advisory engine based on proprietary signal analysis, price behavior, advisory history, and historical signal performance.
Company fundamentals, valuation, risks, and news provide supporting context about the business.
Investor Fit
| Investor style | Fit | Why |
|---|---|---|
| Growth investor | Mixed fit | The company is transitioning its model but faces significant competition and growth headwinds. |
| Momentum investor | Weak fit | The stock has lacked consistent upward momentum, requiring a clear reversal signal. |
| Value investor | Mixed fit | While the stock has corrected from IPO highs, fundamental valuation remains dependent on future profitability. |
| Dividend investor | Weak fit | LegalZoom does not pay a dividend, making it unsuitable for income-focused portfolios. |
| Low-risk investor | Weak fit | High price volatility and competitive threats make this a higher-risk equity. |
Risk Profile
| Risk factor | Level | Why it matters |
|---|---|---|
| Price volatility | High | The stock has experienced significant drawdowns, reflecting uncertainty in growth and execution. |
| Valuation risk | Medium / high | Valuation is tied to future subscriber growth, which is not guaranteed. |
| Competition risk (AI) | High | Low-cost AI legal tools could commoditize core document services. |
| Business quality | Medium | While the brand is strong, the churn-heavy nature of formation services limits franchise quality. |
| Dividend income | Low / none | No dividends are paid to shareholders. |
| Execution risk | Medium / high | Success depends on transitioning users from one-time filings to recurring revenue. |
Price Behavior
Downtrend
The stock has experienced a sustained decline in price over recent periods.
Extreme Price Shocks
The stock has experienced exceptionally large and disruptive price movements during the period.
Analysis of Past Performance
Type Stock | Historic Profit -57.09% | Avg. Invested days 24 | Today’s Advisory SELL |
Upturn Advisory Rating  | Upturn Advisory Performance  2.0 | Stock Returns Performance  1.0 |
| Profits based on simulation | Last Close 11/06/2026 |
Upturn Scorecard
Upturn Star Rating 
Company Fundamentals
Financial Health Rating
Growth Momentum Score
Ownership
Top 5 Institutional Investors
Unit Economics (Per $1K Revenue)
Economic Dimensions
Quantitative Style Profile
Style Classification
Quality Focused
Key Highlights
Company Size Small-Cap Stock | Market Capitalization 864.61M USD | Price to earnings Ratio 47.59 | 1Y Target Price 7.6 |
Price to earnings Ratio 47.59 | 1Y Target Price 7.6 | ||
Volume (30-day avg) 2.7M shares | Beta 1.11 | 52 Weeks Range 5.10 - 10.51 | Updated Date 11/07/2026 |
52 Weeks Range 5.10 - 10.51 | Updated Date 11/07/2026 | ||
Dividends yield (FY) - | Basic EPS (TTM) 0.11 |
How Company Makes Money
| Business area | What it includes | Retail investor read |
|---|---|---|
| Business Formation | LLC/Corp filing services, registered agent fees. | This is the entry point for most customers, providing a large but potentially one-time revenue source. |
| Subscriptions | LegalZoom+ and ongoing compliance services. | This is the core focus for future stability and recurring, higher-margin revenue. |
Analyzing Revenue: Products, Geography and Growth
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Geography revenue - Year on Year
Earnings Date
Report Date 2026-11-04 | When After Market | Estimate 0.09 | Actual 0.09 |
Profitability
Profit Margin 2.56% | Operating Margin (TTM) 9.9% |
Management Effectiveness
Return on Assets (TTM) 5.84% | Return on Equity (TTM) 12.11% |
Valuation
Trailing PE 47.59 | Forward PE 10.45 | Enterprise Value 815.91M | Price to Sales(TTM) 1.08 |
Enterprise Value 815.91M | Price to Sales(TTM) 1.08 | ||
Enterprise Value to Revenue 1.02 | Enterprise Value to EBITDA 8.62 | Shares Outstanding 165.16M | Shares Floating 112.82M |
Shares Outstanding 165.16M | Shares Floating 112.82M | ||
Percent Insiders 5.34 | Percent Institutions 101.71 |
Financial Metrics
🧭 Investment Snapshot
Total Revenue (Scale)
Total money earned from selling products or services before any costs. It is needed to understand the scale of the business and its ability to generate income.
Net Income (Profit)
Final profit after all expenses, interest, and taxes are deducted. It is needed to determine the overall profitability available to shareholders.
Free Cash Flow (Cash Strength)
Cash remaining after operating activities and capital expenditures, showing cash available for growth. It is needed to evaluate the company’s ability to invest, pay dividends, or reduce debt.
📈 Growth & Strength
Operating Income (Core Profit)
Profit from core operations after deducting all operating expenses. It is needed to measure how efficiently the company runs its primary business activities.
EBITDA (Cash Earnings)
Earnings before interest, taxes, depreciation, and amortization, indicating operating cash potential. It is needed to compare operating performance across companies without accounting or financing differences.
Gross Profit (Unit Profitability)
Revenue minus cost of revenue, showing profit after direct production costs. It is needed to evaluate core business profitability before overhead expenses.
🛡️ Financial Safety
Cash (Liquidity Buffer)
Total cash and cash equivalents on hand. It is needed to evaluate immediate liquidity and financial flexibility.
Total Debt (Leverage Risk)
Total debt including both short-term and long-term components. It is needed to assess the company’s leverage and financial risk.
Net Working Capital (Short-Term Health)
Current assets minus current liabilities, indicating short-term liquidity strength. It is needed to assess whether the company can meet its short-term obligations.
🧱 Balance Sheet Strength
Stockholder Equity (Net Worth)
Total equity value held by shareholders. It is needed to understand the net worth of the company from the owners’ perspective.
Total Assets (Asset Base)
The full value of everything the company owns, including cash, inventory, equipment, and investments. It is needed to understand the resource base used to generate revenue.
Income Before Tax (Pre-Tax Earnings)
Income before provision for income taxes. It is needed to analyze profitability independent of tax structures.
⚙️ Cost & Drag Factors
Cost of Revenue (Production Cost)
Direct costs required to produce and deliver the products or services sold. It is needed to assess efficiency in production and service delivery.
Total Operating Expenses (Operating Cost)
Indirect costs of running the business such as salaries, marketing, and administration. It is needed to understand how much it costs to sustain ongoing business operations.
Income Tax Expense (Tax Drag)
Amount of taxes paid or payable to the government. It is needed to evaluate the impact of taxation on overall profitability.
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