📊 LZ Key Takeaways
Is LZ a Good Investment? Thesis Analysis
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.
Why Buy 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
LZ Investment Risks to Consider
- 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
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
LZ Financial Metrics
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
LZ Profitability Ratios
LZ vs Technology Sector
How LEGALZOOM.COM, INC. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is LZ Overvalued or Undervalued?
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.
LZ Balance Sheet & Liquidity
LZ 5-Year Financial Trend & Growth Analysis
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 Growth Metrics (YoY)
LZ Quarterly 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.
LZ Capital Allocation
LZ SEC 10-K & 10-Q Filing 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 an AI rating of HOLD with 62% 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.
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.
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 62% 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).