Track market-moving stories before they get noisy

Investors in LegalZoom.com, Inc. (LZ - Free Report) need to pay close attention to the stock based on moves in the options market lately. That is because the Sep 18, 2026 $2 Put had some of the highest implied volatility of all equity options today.

What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

What do the Analysts Think?Clearly, options traders are pricing in a big move for LegalZoom.com shares, but what is the fundamental picture for the company? Currently, LegalZoom.com is a Zacks Rank #3 (Hold) in the Industrial Services industry that ranks in the Bottom 20% of our Zacks Industry Rank. Over the last 30 days, no analysts have increased their earnings estimates for the current quarter, while three analysts have revised their estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from 22 cents per share to 21 cents in that period.

Given the way analysts feel about LegalZoom.com right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

LegalZoom told investors in May 2026 that full-year revenue would reach $810 million to $830 million. On August 5, that outlook was cut. Levi & Korsinsky is investigating potential securities law violations on behalf of LZ investors. LegalZoom told investors in May 2026 that full-year revenue would reach $810 million to $830 million. On August 5, that outlook was cut. Levi & Korsinsky is investigating potential securities law violations on behalf of LZ investors.

LegalZoom.com, Inc. (NASDAQ: LZ) shares dropped after the Company's August 5 second-quarter release, in which adjusted earnings per share came in at $0.16 versu

JPMorgan and William Blair downgraded LegalZoom after the Company guided third-quarter revenue to $194 million -- below Wall Street estimates -- and cut its full-year outlook. Levi & Korsinsky is investigating potential securities law violations.

, /PRNewswire/ -- Two Wall Street firms downgraded LegalZoom.com, Inc. (NASDAQ: LZ) after the Company's August 5, 2026 second-quarter release, and the stock declined as investors reacted to a reduced forward outlook. Shareholders who lost money on LZ are encouraged to submit their losses for review here  or contact Joseph E. Levi, Esq. at [email protected]  or (212) 363-7500.

The reported quarter did not drive the decline. LegalZoom reported revenue of approximately $205.3 million and adjusted earnings of $0.16 per share, exceeding consensus estimates. Instead, the market reacted to the Company's reduced outlook.

For the third quarter, LegalZoom guided third-quarter revenue to approximately $194 million, below analyst expectations, and lowered full-year 2026 revenue guidance to approximately $795 million to $805 million from its prior range of $810 million to $830 million. The Company also announced a workforce reduction of approximately 13%. Following these disclosures, JPMorgan and William Blair downgraded LegalZoom, citing reduced growth visibility and concerns regarding the sustainability of the Company's search-driven customer acquisition channel.

Investors who purchased LZ shares and suffered losses may request a no-cost claim evaluation , or call (212) 363-7500.

ABOUT THE FIRM  -- For over two decades, Levi & Korsinsky has represented shareholders in securities class actions. Ranked in ISS Top 50 for seven consecutive years.

Frequently Asked Questions About the LZ Investigation

Q: Who is conducting the LZ investigation?  A: Levi & Korsinsky, LLP is investigating potential securities fraud claims on behalf of investors who purchased LZ securities. The firm is nationally recognized, ranked in the ISS Top 50 for seven consecutive years, and has recovered hundreds of millions of dollars for aggrieved investors.

Q: Who is eligible to participate in the LZ investigation?  A: Investors who purchased LZ stock or securities and suffered financial losses may be eligible. Eligibility is based on purchase date and documented losses -- not on whether you still hold the shares.

Q: Which statements are being investigated as potentially misleading?  A: The investigation concerns whether LegalZoom.com, Inc. made materially false or misleading statements regarding its revenue outlook and customer acquisition trends. When the Company reduced full-year revenue guidance to approximately $795-$805 million and guided third-quarter revenue to $194 million, the stock price declined.

Q: What do LZ investors need to do right now?  A: Gather brokerage records including purchase dates, share quantities, and prices paid. Contact Levi & Korsinsky for a free, no-obligation evaluation at [email protected]  or (212) 363-7500. No immediate action is required to remain eligible to participate in the investigation.

Q: What documents do I need to participate?  A: Brokerage statements or trade confirmations showing purchase dates, share quantities, prices paid, and any subsequent sale dates and prices.

Q: What if I already sold my LZ shares -- can I still recover losses? A: Yes. Eligibility is based on when you purchased, not whether you still hold the shares. Investors who bought LZ and sold at a loss may still participate in the investigation.

Q: What does it cost me to participate?  A: There is no upfront cost to participate. Securities investigations and any resulting actions are generally handled on a contingency basis. No upfront fees, no retainer, and no out-of-pocket costs.

Q: How long will the investigation take to resolve?  A: The timeline depends on the facts developed during the investigation, the court schedule, and whether legal action is later pursued, resolved, or litigated further.

CONTACT:
Levi & Korsinsky, LLP
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
[email protected]
Tel: (212) 363-7500
Fax: (212) 363-7171

Attorney Advertising. Prior results do not guarantee similar outcomes.

SOURCE Levi & Korsinsky, LLP

34.3K Followers

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

LegalZoom.com, Inc. (LZ) Q2 2026 Earnings Call Transcript

For the quarter ended June 2026, LegalZoom (LZ - Free Report) reported revenue of $205.29 million, up 6.6% over the same period last year. EPS came in at $0.16, compared to $0.15 in the year-ago quarter.

The reported revenue represents a surprise of -0.34% over the Zacks Consensus Estimate of $205.98 million. With the consensus EPS estimate being $0.15, the EPS surprise was +6.67%.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

Here is how LegalZoom performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

Average revenue per subscription unit (ARPU) at period end: $0.27 million versus the two-analyst average estimate of $0.26 million.Average order value (AOV): $256.00 versus $248.97 estimated by two analysts on average.Transaction units: 281 compared to the 286 average estimate based on two analysts.Subscription units at period end: 1,892 versus 1,921 estimated by two analysts on average.Revenue- Subscription: $133.4 million compared to the $131.28 million average estimate based on two analysts. The reported number represents a change of +11.3% year over year.Revenue- Transaction: $71.89 million versus $75.15 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -1% change.View all Key Company Metrics for LegalZoom here>>>

Shares of LegalZoom have returned +14.6% over the past month versus the Zacks S&P 500 composite's +3.5% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term.

Revenue of $205.3 million, up 7% year-over-year, driven by subscription revenue increasing 11% year-over-year, representing LegalZoom’s fifth consecutive quarter of double digit subscription revenue growth Subscription revenue of $133.4 million up 11% year-over-year from strength in human-in-the-loop offerings and pricing initiatives Net income of $5.2 million and net income margin of 3%; with net income margin increasing approximately 260 basis points year-over-yearAdjusted EBITDA of $45.9 million and Adjusted EBITDA margin of 22%, ahead of the high end of our guidance range; with Adjusted EBITDA margin increasing approximately 220 basis points year-over-yearCommitment to shareholder returns; completed $45.5 million of share repurchases in the quarter, with approximately $80.4 million remaining under the existing authorizationEnded the quarter with cash and cash equivalents of $167.2 million and delivered $39.5 million in cash from operating activities and $33.7 million in free cash flow with no debt outstanding as of June 30, 2026Updating full-year 2026 revenue outlook to $795.0-$805.0 million and Adjusted EBITDA to $190.0-$195.0 million, reflecting the recent industry-wide shift in customer discovery away from traditional search, while maintaining strong margin discipline
MOUNTAIN VIEW, Calif., Aug. 05, 2026 (GLOBE NEWSWIRE) -- LegalZoom (Nasdaq: LZ), America’s #1 online legal services company, today announced results for its second quarter ended June 30, 2026.

"Since late 2024, we've deliberately repositioned LegalZoom around subscription relationships that pair AI with trusted human expertise," said Jeff Stibel, Chairman and Chief Executive Officer of LegalZoom. "That strategy is working. While demand for what we do is intact, discovery is moving. We have been actively building new customer acquisition channels for more than a year, and our outlook fully reflects today's environment, with no recovery in traditional search assumed. In the AI channels where discovery is heading, every visit is incremental. We've partnered with the leading AI companies, we have more brand references across AI platforms than any competitor, and we haven't assumed how quickly this scales. That's the upside we're positioned to capture."

"We're updating our revenue expectations based on recent changes in the customer acquisition environment, while our profitability outlook reflects the discipline of our operating model," said Noel Watson, Chief Operating Officer and Chief Financial Officer. "We continue to improve operating efficiency, expand margins and generate strong cash flow while investing behind the initiatives that support our long-term growth strategy."

Second Quarter 2026 Highlights

Revenue was $205.3 million for the quarter, up 7% year-over-year. Transaction revenue of $71.9 million decreased 1% year-over-year.Subscription revenue of $133.4 million grew 11% year-over-year. Net income was $5.2 million for the quarter, or 3% of revenue, compared to a net loss of $0.3 million, or less than 1% of revenue, in the same period in 2025.Adjusted EBITDA was $45.9 million for the quarter, or 22% of revenue, compared to $39.0 million, or 20% of revenue, in the same period in 2025.Non-GAAP net income was $27.4 million for the quarter compared to $28.3 million in the same period in 2025.Cash and cash equivalents were $167.2 million as of June 30, 2026 compared to $203.1 million as of December 31, 2025.Cash flows provided by operating activities were $39.5 million for the quarter ended June 30, 2026 compared to $39.1 million in the same period in 2025.Free cash flow was $33.7 million for the quarter ended June 30, 2026 compared to $31.6 million in the same period in 2025.Basic and diluted net income per share was $0.03 for the quarter compared to a basic and diluted net loss per share of $— for the same period in 2025. Basic and diluted Non-GAAP net income per share was $0.16 for the quarter compared to basic and diluted Non-GAAP net income per share of $0.16 and $0.15, respectively, for the same period in 2025. Key Business Metrics and Non-GAAP Financial Measures
(Unaudited, in thousands except AOV, ARPU and percentages)

 Three Months Ended
June 30,
 % Growth Six Months Ended
June 30, % Growth  (Decline)  (Decline) 2026
  2025  YOY  2026   2025  YOYTotal revenue$205,289  $192,509  7% $412,070  $375,619  10%Transaction revenue$71,890  $72,611  (1)% $148,513  $139,464  6%Subscription revenue$133,399  $119,898  11% $263,557  $236,155  12%Gross profit$139,930  $125,111  12% $272,183  $241,661  13%Gross margin 68%  65% 5%  66%  64% 3%Net Income (loss)$5,183  $(266) n/m $6,287  $4,861  29%Net income (loss) margin 3%  —% n/m  2%  1% 100%Net Income (loss) per share — basic:$0.03  $—  n/m $0.04  $0.03  33%Net Income (loss) per share — diluted:$0.03  $—  n/m $0.04  $0.03  33%Net cash provided by operating activities$39,547  $39,139  1% $86,829  $89,842  (3)%Non-GAAP Financial Measures           Non GAAP net income$27,444  $28,329  (3)% $49,515  $52,151  (5)%Non GAAP net income per share — basic:$0.16  $0.16  —% $0.28  $0.29  (3)%Non GAAP net income per share — diluted:$0.16  $0.15  7% $0.28  $0.29  (3)%Adjusted EBITDA$45,898  $38,965  18% $82,360  $75,977  8%Adjusted EBITDA margin 22%  20% 10%  20%  20% —%Free cash flow$33,690  $31,609  7% $74,664  $72,934  2%Key Business Metrics           Transaction units 281   278  1%  656   619  6%Business formations 125   131  (5)%  267   262  2%Average order value (AOV)$256  $262  (2)% $227  $225  1%Subscription units at period end 1,892   1,955  (3)%  1,892   1,955  (3)%Average revenue per subscription unit (ARPU) at period end$270  $256  5% $270  $256  5%Certain percentages may not recalculate due to rounding.              Financial Guidance and Outlook
LegalZoom is updating its revenue outlook and Adjusted EBITDA outlook for the full year ending December 31, 2026 as follows:

Revenue is expected to be in the range of $795 million to $805 million, or 6% year-over-year growth at the midpoint. This compares to the Company’s previous revenue outlook in the range of $810 million to $830 million, or 8% growth at the midpoint. LegalZoom’s outlook reflects the continued scaling of our higher-value growth initiatives and ongoing momentum from our partner channel, partially offset by a more cautious view of customer acquisition for the remainder of the year.
Adjusted EBITDA is expected to be in the range of $190 million to $195 million, reflecting 12% year-over-year growth at the midpoint, and a 24% margin. This compares to the Company’s previous Adjusted EBITDA outlook of $190 million to $200 million, or 13% year-over-year growth, and a 24% margin. LegalZoom’s outlook reflects disciplined cost management, ongoing gross margin improvement and the benefits from a 13% workforce reduction announced today.
For the third quarter ending September 30, 2026 LegalZoom expects:

Revenue in the range of $192 million to $196 million, or 2% year-over-year growth at the midpoint.
Adjusted EBITDA in the range of $49 million to $51 million, an 8% year-over-year increase at the midpoint, and a 26% margin.
Webcast and Conference Call Information
A webcast and conference call to discuss second quarter 2026 results is scheduled for today, August 5, 2026, at 4:30 p.m. Eastern time/1:30 p.m. Pacific time. Those interested in participating in the conference call are invited to register Here.

A live audio webcast of the event will be available on the LegalZoom Investor Relations website: https://investors.legalzoom.com. An archived replay of the webcast also will be available shortly after the live event.

Forward-Looking Statements

This press release contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts contained in this press release may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this press release include, but are not limited to, statements regarding our quarterly and annual guidance.

The forward-looking statements in this press release are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to the following: our dependence on business formations; our dependence on customers expanding the use of our platform, including converting our transactional customers to subscribers and our subscribers renewing their subscriptions with us; the impact of macroeconomic challenges or uncertainty on our business; our ability to remain profitable in the future; our ability to provide high-quality products and services, customer care and customer experience; our ability to continue to innovate and provide a platform that is useful to our customers and that meets our customers’ expectations; the competitive legal solutions market; our dependence on our brand and reputation; our ability to maintain and expand strategic relationships with third parties; our ability to hire and retain top talent and motivate our employees; risks and costs associated with complex and evolving laws and regulations; our ability to maintain effective in our internal control over financial reporting; and any factors discussed in the section titled “Risk Factors” included in our Quarterly Report on Form 10-Q for the three months ended March 31, 2026 filed with the Securities and Exchange Commission (the “SEC”) on May 6, 2026, as well as any factors in our subsequent filings with the SEC. The forward-looking statements in this press release are based upon information available to us as of the date of this press release, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this press release with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this press release, whether as a result of any new information, future events or otherwise.

About Non-GAAP Financial Measures

This press release includes non-GAAP financial measures including Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP net income, Non-GAAP net income (loss) margin, Non-GAAP net income per share and free cash flow. We use these non-GAAP financial measures to better understand and evaluate our core operating performance. We believe that these non-GAAP financial measures provide management and our investors with useful information about our financial performance and liquidity, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important measures used by our management for financial and operational decision-making. We also believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. These non-GAAP measures should not be considered in isolation of, or as a substitute or an alternative to, measures prepared and presented in accordance with GAAP.

We define Adjusted EBITDA as net income (loss) adjusted to exclude interest expense, interest income, provision for (benefit from) income taxes, depreciation and amortization, other expense (income), net, stock-based compensation and certain non-recurring income and expenses from time to time. We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of revenue.

Adjusted EBITDA is one of the primary performance measures used by our management and our board of directors to understand and evaluate our financial performance and operating trends, including period-to-period comparisons, preparing and approving our annual budget and operational planning. In assessing our performance, we exclude certain expenses that we believe are not comparable period over period or that we believe are not indicative of our underlying operating performance. There are a number of limitations related to the use of Adjusted EBITDA rather than net income (loss), which include that Adjusted EBITDA:

may be calculated differently by other companies in our industry, limiting its usefulness as a comparative measure;does not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments;excludes depreciation and amortization and, although these are non-cash expenses, the assets being depreciated may be replaced in the future;does not reflect changes in, or cash requirements for, our working capital needs;excludes stock-based compensation expense, which has been, and will continue to be, a significant recurring expense for our business and an important part of our compensation strategy; anddoes not reflect certain expenses that we do not consider representative of our underlying operating performance, but that reduce cash available to us. We define Non-GAAP net income as net income (loss) adjusted to exclude amortization of acquired intangible assets, stock-based compensation expense and certain non-recurring income and expenses from time to time, net of related income tax impacts. We define net income (loss) margin as net loss as a percentage of revenue. We define Non-GAAP net income (loss) margin as Non-GAAP net income as a percentage of revenue. We define Non-GAAP net income (loss) per share attributable to common stockholders as Non-GAAP net income (loss) divided by basic and diluted weighted-average common stock.

Free cash flow is a liquidity measure used by management in evaluating the cash generated by our operations after purchases of property and equipment including capitalized internal-use software. We believe free cash flow provides useful information to management and investors about the amount of cash generated by our business that can be used for strategic opportunities, including investing in our business and strengthening our balance sheet, once our business needs and obligations are met. The usefulness of free cash flow as an analytical tool has limitations because it excludes certain items that are settled in cash, does not represent residual cash flow available for discretionary expenses, does not reflect our future contractual commitments, and may be calculated differently by other companies in our industry.

We are not providing a reconciliation for our non-GAAP outlook on a forward-looking basis (including the information under “Financial Guidance and Outlook” above), as we are unable to provide a meaningful calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that would impact the most directly comparable forward-looking GAAP financial measure that have not yet occurred, are out of LegalZoom’s control and/or cannot be reasonably predicted. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

The tables in this press release contain more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.

About LegalZoom

LegalZoom is a leading online platform for legal services, transforming how individuals and small businesses navigate the legal system. By combining intuitive technology with access to experienced attorneys, whether through our vast independent attorney network or our own law firm, we offer the tools and guidance people need to confidently manage everything from business formation and compliance to intellectual property protection and ongoing business management and legal support. As AI reshapes how legal work gets done, LegalZoom is at the forefront of the human-in-the-loop approach, ensuring that the speed and efficiency of AI is always backed by the judgment and accountability of qualified professionals.

With over two decades of experience and millions of customers served, LegalZoom helps individuals and small businesses navigate legal needs with confidence. For more information, please visit www.legalzoom.com.

Contact
Investor Relations
[email protected]

LegalZoom.com, Inc.
Unaudited Condensed Consolidated Balance Sheets
(Inthousands, except par values)     June 30,
2026 December 31,
2025Assets   Current assets:   Cash and cash equivalents$167,227  $203,100 Accounts receivable, net of allowance 19,759   20,589 Prepaid expenses and other current assets 25,187   18,234 Total current assets 212,173   241,923 Property and equipment, net 53,540   58,045 Goodwill 140,705   140,705 Intangible assets, net 14,932   18,152 Operating lease right-of-use assets 14,150   13,414 Deferred income taxes 24,095   31,884 Other assets 6,764   7,399 Total assets$466,359  $511,522 Liabilities and stockholders’ equity   Current liabilities:   Accounts payable$35,875  $27,167 Accrued expenses and other current liabilities 56,055   83,361 Deferred revenue 221,180   203,653 Operating lease liabilities 5,003   4,338 Total current liabilities 318,113   318,519 Operating lease liabilities, non-current 10,133   10,025 Deferred revenue 234   277 Other liabilities 10,723   10,819 Total liabilities 339,203   339,640 Commitments and contingencies   Stockholders’ equity:   Preferred stock, $0.001 par value; 100,000 shares authorized at June 30, 2026 and December 31, 2025, none issued or outstanding at June 30, 2026 and December 31, 2025 —   — Common stock, $0.001 par value; 1,000,000 shares authorized; 167,451 shares and 177,624 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively 169   179 Additional paid-in capital 1,344,473   1,305,936 Accumulated deficit (1,217,855)  (1,134,414)Accumulated other comprehensive income 369   181 Total stockholders’ equity 127,156   171,882 Total liabilities and stockholders’ equity$466,359  $511,522  LegalZoom.com, Inc.
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)       Three Months Ended June 30, Six Months Ended June 30,   2026   2025   2026   2025 Revenue $205,289  $192,509  $412,070  $375,619 Cost of revenue  65,359   67,398   139,887   133,958 Gross profit  139,930   125,111   272,183   241,661 Operating expenses:        Sales and marketing  78,849   69,580   157,517   130,958 Technology and development  20,047   21,635   39,652   42,957 General and administrative  30,384   36,996   61,600   76,217 Gain on sale of assets held for sale  —   —   —   (14,337)Total operating expenses  129,280   128,211   258,769   235,795 Income (loss) from operations  10,650   (3,100)  13,414   5,866 Interest expense  (126)  (165)  (802)  (347)Interest income  1,627   2,069   3,275   3,552 Other (expense) income, net  (3)  652   78   999 Income (loss) before income taxes  12,148   (544)  15,965   10,070 Provision for (benefit from) income taxes  6,965   (278)  9,678   5,209 Net income (loss) $5,183  $(266) $6,287  $4,861 Net income (loss) attributable to common stockholders—basic and diluted        Net income (loss) per share — basic: $0.03  $—  $0.04  $0.03 Net income (loss) per share — diluted: $0.03  $—  $0.04  $0.03 Weighted-average shares used to compute net income (loss) per share:        Weighted-average shares used to compute net income (loss) per share — basic:  170,189   180,880   175,568   178,837 Weighted-average shares used to compute net income (loss) per share — diluted:  171,641   180,880   177,627   182,694  LegalZoom.com, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)   Six Months Ended June 30,  2026   2025 Cash flows from operating activities   Net income$6,287  $4,861 Adjustments to reconcile net income to net cash provided by operating activities:   Depreciation and amortization 22,411   21,745 Amortization of debt issuance costs 95   112 Amortization of right-of-use assets 1,887   1,484 Stock-based compensation 44,910   60,394 Gain on sale of assets held for sale —   (14,337)Gain on sale of available-for-sale debt security —   (648)Loss on disposal of property and equipment 15   97 Deferred income taxes 7,825   (5,725)Change in fair value of other equity security —   (302)Unrealized foreign exchange loss 248   31 Changes in operating assets and liabilities, net of effects of business combination:   Accounts receivable 828   (14,254)Prepaid expenses and other current assets (6,979)  3,726 Other assets 522   83 Accounts payable 8,698   4,454 Accrued expenses and other liabilities (15,566)  (697)Operating lease liabilities (1,852)  (1,056)Income tax payable 15   239 Deferred revenue 17,485   29,635 Net cash provided by operating activities 86,829   89,842 Cash flows from investing activities   Acquisition, net of cash acquired —   (48,468)Purchase of property and equipment (12,165)  (16,908)Proceeds from sale of available-for-sale debt security —   1,507 Proceeds from sale of assets held for sale —   37,051 Net cash used in investing activities (12,165)  (26,818)Cash flows from financing activities   Repayment of capital lease obligations —   (2)Payment of deferred consideration from business acquisition (12,514)  — Share repurchase costs (excise tax) —   (1,264)Repurchase of common stock (89,010)  (20,419)Shares surrendered for settlement of minimum statutory tax withholding (9,459)  (11,172)Proceeds from issuance of stock under employee stock plans 518   44,657 Net cash (used in) provided by financing activities (110,465)  11,800 Effect of exchange rate changes on cash and cash equivalents (72)  147 Net (decrease) increase in cash and cash equivalents (35,873)  74,971 Cash and cash equivalents, at beginning of the period 203,100   142,064 Cash and cash equivalents, at end of the period$167,227  $217,035          Adjusted EBITDA and Adjusted EBITDA Margin

The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for each of the periods indicated (unaudited):

  Three Months Ended June 30, Six Months Ended June 30,   2026   2025   2026   2025   (in thousands, except percentages)Reconciliation of net income (loss) to Adjusted EBITDA        Net income (loss) $5,183  $(266) $6,287  $4,861 Interest expense  126   165   802   347 Interest income  (1,627)  (2,069)  (3,275)  (3,552)Provision for (benefit from) income taxes  6,965   (278)  9,678   5,209 Depreciation and amortization  11,274   11,339   22,411   21,745 Other expense (income), net  3   (652)  (78)  (999)Stock-based compensation  23,596   30,638   44,910   60,394 Transaction-related expenses(1)  —   —   604   1,543 Gain on sale of assets held for sale  —   —   —   (14,337)Restructuring costs(2)  378   88   1,021   766 Adjusted EBITDA $45,898  $38,965  $82,360  $75,977 Net income (loss) margin  3%  —%  2%  1%Adjusted EBITDA margin  22%  20%  20%  20% (1)For 2025, transaction-related expenses are primarily related to our acquisition of Formation Nation. For 2026, transaction-related expenses are related to the evaluation and pursuit of strategic transactions.(2)For 2026 and 2025, restructuring costs are related to the reduction of our global headcount.   Non-GAAP Net Income, Non-GAAP Net Income (Loss) Margin and diluted Non-GAAP Net Income Per Share

The following table presents a reconciliation of net income (loss) to Non-GAAP net income for each of the periods indicated (unaudited):

  Three Months Ended June 30, Six Months Ended June 30,   2026   2025   2026   2025   (in thousands, except per share amounts)Reconciliation of net income to Non-GAAP net income        Net income (loss) $5,183  $(266) $6,287  $4,861 Amortization of acquired intangible assets  1,610   2,381   3,220   4,028 Stock-based compensation  23,596   30,638   44,910   60,394 Transaction-related expenses(1)  —   —   604   1,543 Restructuring costs(2)  378   88   1,021   766 Gain on sale of assets held for sale  —   —   —   (14,337)Income tax effects(3)  (3,323)  (4,512)  (6,527)  (5,104)Non-GAAP net income  27,444   28,329   49,515   52,151 Net income (loss) margin  3%  —%  2%  1%Non-GAAP net income (loss) margin  13%  15%  12%  14%Net income (loss) per share — basic $0.03  $—  $0.04  $0.03 Net income (loss) per share — diluted $0.03  $—  $0.04  $0.03 Non-GAAP net income per share — basic $0.16  $0.16  $0.28  $0.29 Non-GAAP net income per share — diluted $0.16  $0.15  $0.28  $0.29 Weighted-average shares used to compute net income (loss) per share — basic  170,189   180,880   175,568   178,837 Weighted-average shares used to compute net income (loss) per share — diluted  171,641   180,880   177,627   182,694 Weighted-average shares used to compute Non-GAAP net income per share — basic  170,189   180,880   175,568   178,837 Weighted-average shares used to compute Non-GAAP net income per share — diluted  171,641   184,482   177,627   182,694  (1)For 2025, transaction-related expenses are primarily related to our acquisition of Formation Nation. For 2026, transaction-related expenses are related to the evaluation and pursuit of strategic transactions.(2)For 2026 and 2025, restructuring costs are related to the reduction of our global headcount.(3)The estimated income tax effect of the non-GAAP pre-tax adjustments is determined by applying the statutory rate of the originating jurisdiction, if applicable.   The following table shows the computation of basic and diluted Non-GAAP net income per share (unaudited):

  Three Months Ended June 30, Six Months Ended June 30,  2026
 2025
 2026
 2025
  (in thousands, except per share amounts)Non-GAAP net income and Non-GAAP net income per share:        Non-GAAP net income $27,444 $28,329 $49,515 $52,151Reconciliation of denominator for net income per share to Non-GAAP net income per share:        Weighted-average shares used to compute net income (loss) per share — basic:  170,189  180,880  175,568  178,837Effect of potentially dilutive securities:        Options to purchase common stock  31  58  34  59RSUs and PSUs  1,410  3,526  2,019  3,782Employee stock purchase plan  11  18  6  16Weighted-average common stock used in computing Non-GAAP net income per share — diluted  171,641  184,482  177,627  182,694Non-GAAP net income per share — basic $0.16 $0.16 $0.28 $0.29Non-GAAP net income per share — diluted $0.16 $0.15 $0.28 $0.29              Free Cash Flow

The following table presents a reconciliation of net cash provided by operating activities to free cash flow (unaudited):

  Three Months Ended June 30, Six Months Ended June 30,   2026   2025   2026   2025   (in thousands)Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow        Net cash provided by operating activities  39,547   39,139   86,829   89,842 Purchase of property and equipment  (5,857)  (7,530)  (12,165)  (16,908)Free cash flow $33,690  $31,609  $74,664  $72,934 

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- #SMB--LegalZoom (NASDAQ: LZ), America's #1 online legal services company, today released "How America Prepares Its Legacy," a new report analyzing hundreds of thousands of estate plans created on its platform between 2022 and 2025. Released ahead of National Make-A-Will Month in August, the report finds that while more than 50% of American adults still don't have an estate plan, more families are embracing trusts.Drawing on LegalZoom proprietary data and nationa.

Investors interested in Industrial Services stocks are likely familiar with LegalZoom (LZ) and W.W. Grainger (GWW).

July 15, 2026 09:00 ET  | Source: LegalZoom.com, Inc.

MOUNTAIN VIEW, Calif., July 15, 2026 (GLOBE NEWSWIRE) -- LegalZoom (Nasdaq: LZ), America’s #1 online legal services company, today announced it will report its financial results for the second quarter ended June 30, 2026, on Wednesday, August 5, 2026, after the close of market.

Jeff Stibel, Chairman and Chief Executive Officer, and Noel Watson, Chief Operating Officer and Chief Financial Officer, will host a conference call and webcast at 4:30 p.m. ET the same day to discuss the financial results.

LegalZoom Second Quarter 2026 Conference Call Details

Date:Wednesday, August 5, 2026 Time:4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) Webcast:https://edge.media-server.com/mmc/p/529fsek9  Dial In Registration:        

https://register-conf.media-server.com/register/BIcefece15278840718a7c866d03f62e37

A replay of the webcast also will be available on the LegalZoom Investor Relations website, https://investors.legalzoom.com, following the live event.

About LegalZoom
LegalZoom is a leading online platform for legal services, transforming how individuals and small businesses navigate the legal system. By combining intuitive technology with access to experienced attorneys—whether through our vast independent attorney network or our own law firm—we offer the tools and guidance people need to confidently manage everything from business formation and compliance to intellectual property protection and ongoing business management and legal support.

As AI reshapes how legal work gets done, LegalZoom is at the forefront of the human-in-the-loop approach, ensuring that the speed and efficiency of AI is always backed by the judgment and accountability of qualified professionals. With over two decades of experience and millions of customers served, LegalZoom helps individuals and small businesses navigate legal needs with confidence. For more information, please visit https://www.legalzoom.com/.

Contact

[email protected]

Investors interested in Industrial Services stocks are likely familiar with LegalZoom (LZ) and W.W. Grainger (GWW).

As a business that makes its coin by assisting with legal documents, it's appropriate that LegalZoom's (NASDAQ: LZ) stock has been rising over the past few days due to a contract it signed with a business partner.

Obviously encouraged by this deepening relationship, investors were snapping up LegalZoom shares. According to data compiled by S&P Global Market Intelligence, the stock rose nearly 16% over the week.

The full force of the law That partner is veteran online services company GoDaddy. LegalZoom announced on Thursday that it had become the sole legal services provider within GoDaddy's ecosystem.

Image source: Getty Images.

This puts LegalZoom in front of the more than 20.4 million customers GoDaddy claims to serve, according to the latter's fourth-quarter and full-year 2025 earnings release. Those users will have easy access to LegalZoom's popular company formation services, among other offerings.

"GoDaddy customers can now benefit from LegalZoom's guided formation flow and fast LLC filing speeds to get their business up and running as soon as possible, while enjoying peace of mind knowing that attorney guidance is available if they need it," LegalZoom wrote in its announcement.

Today's Change

(

0.68

%) $

0.04

Current Price

$

5.91

No estimates given What LegalZoom didn't provide was any estimates of how the new GoDaddy tie-up might impact its fundamentals. Regardless, any time a company can gain fairly easy exposure to tens of millions of potential clients, and within the universe of an enduring and popular tech services provider, we have to consider that a win.

I wouldn't necessarily buy LegalZoom stock on this deal alone. That said, if I were a shareholder, I'd consider it a positive development for the company and look forward to future collaborations with big businesses.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends GoDaddy. The Motley Fool has a disclosure policy.

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- #SMB--LegalZoom (Nasdaq: LZ), America's #1 online legal services company, today released a new survey revealing how small business owners are navigating a complex environment shaped by fluctuating costs, evolving technology, and economic volatility. The survey comes at a time when more Americans are stepping into entrepreneurship: LinkedIn data shows a 69% year-over-year increase in U.S. members adding “founder” to their profiles, underscoring a growing shift t.

The market expects LegalZoom (LZ - Free Report) to deliver flat earnings compared to the year-ago quarter on higher revenues when it reports results for the quarter ended March 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The earnings report, which is expected to be released on May 6, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

Zacks Consensus EstimateThis online platform for legal services is expected to post quarterly earnings of $0.13 per share in its upcoming report, which represents no change from the year-ago quarter.

Revenues are expected to be $202.39 million, up 10.5% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 13.33% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for LegalZoom?For LegalZoom, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +4.48%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination indicates that LegalZoom will most likely beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that LegalZoom would post earnings of $0.18 per share when it actually produced earnings of $0.17, delivering a surprise of -5.56%.

The company has not been able to beat consensus EPS estimates in any of the last four quarters.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

LegalZoom appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

W.W. Grainger (GWW - Free Report) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended March 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on May 7. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

Zacks Consensus EstimateThis seller of maintenance and other supplies is expected to post quarterly earnings of $10.20 per share in its upcoming report, which represents a year-over-year change of +3.5%.

Revenues are expected to be $4.57 billion, up 6.1% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.04% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for W.W. Grainger?For W.W. Grainger, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +2.27%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination indicates that W.W. Grainger will most likely beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that W.W. Grainger would post earnings of $9.43 per share when it actually produced earnings of $9.44, delivering a surprise of +0.11%.

Over the last four quarters, the company has beaten consensus EPS estimates three times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

W.W. Grainger appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Expected Results of an Industry PlayerAmong the stocks in the Zacks Industrial Services industry, LegalZoom (LZ - Free Report) , is soon expected to post earnings of $0.13 per share for the quarter ended March 2026. This estimate indicates no change from the year-ago quarter. This quarter's revenue is expected to be $202.39 million, up 10.5% from the year-ago quarter.

Over the last 30 days, the consensus EPS estimate for LegalZoom has been revised 13.3% up to the current level. Nevertheless, the company now has an Earnings ESP of +4.48%, reflecting a higher Most Accurate Estimate.

This Earnings ESP, combined with its Zacks Rank #3 (Hold), suggests that LegalZoom will most likely beat the consensus EPS estimate. The company could not beat consensus EPS estimates in any of the last four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

LegalZoom (LZ - Free Report) came out with quarterly earnings of $0.12 per share, missing the Zacks Consensus Estimate of $0.13 per share. This compares to earnings of $0.13 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -10.45%. A quarter ago, it was expected that this online platform for legal services would post earnings of $0.18 per share when it actually produced earnings of $0.17, delivering a surprise of -5.56%.

Over the last four quarters, the company has not been able to surpass consensus EPS estimates.

LegalZoom, which belongs to the Zacks Industrial Services industry, posted revenues of $206.78 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 2.17%. This compares to year-ago revenues of $183.11 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

LegalZoom shares have lost about 32.4% since the beginning of the year versus the S&P 500's gain of 6%.

What's Next for LegalZoom?While LegalZoom has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for LegalZoom was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.16 on $206.21 million in revenues for the coming quarter and $0.75 on $816.38 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Industrial Services is currently in the top 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Eos Energy Enterprises, Inc. (EOSE - Free Report) , another stock in the same industry, has yet to report results for the quarter ended March 2026. The results are expected to be released on May 13.

This company is expected to post quarterly loss of $0.28 per share in its upcoming report, which represents a year-over-year change of -40%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Eos Energy Enterprises, Inc.'s revenues are expected to be $56.44 million, up 439.6% from the year-ago quarter.

LegalZoom.com, Inc. (LZ) Q1 2026 Earnings Call Transcript

Investors with an interest in Industrial Services stocks have likely encountered both LegalZoom (LZ - Free Report) and Fastenal (FAST - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

LegalZoom and Fastenal are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that LZ has an improving earnings outlook. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

LZ currently has a forward P/E ratio of 8.37, while FAST has a forward P/E of 36.28. We also note that LZ has a PEG ratio of 0.49. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FAST currently has a PEG ratio of 2.85.

Another notable valuation metric for LZ is its P/B ratio of 6.48. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, FAST has a P/B of 12.87.

Based on these metrics and many more, LZ holds a Value grade of A, while FAST has a Value grade of D.

LZ stands above FAST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LZ is the superior value option right now.

LegalZoom maintains a Hold rating as Q1 growth was aided by one-off items and margin weakness persists. The higher-value subscription strategy is gaining traction, with registered agent and legal advisory revenues up 17% and 25% y/y, respectively. Partnerships, notably with GoDaddy, are expanding LZ's distribution, but subscription units remained flat y/y at 1.92 million.

Jeffrey M. Stibel, Chief Executive Officer of LegalZoom.com (LZ +0.68%), reported an open-market purchase of 125,000 shares, valued at approximately ~$769,000, according to a SEC Form 4 filing dated May 11, 2026.

Transaction summaryMetricValueShares traded125,000Transaction value~$769,000Post-transaction shares (direct)2,955,609Post-transaction value (direct ownership)~$18.18 millionTransaction and post-transaction values based on SEC Form 4 weighted average purchase price ($6.15).

Key questionsHow does this purchase compare to Stibel's historical trading activity?
This is Stibel’s only reported open-market buy in the past year, following a series of 12 administrative (non-economic) filings and a 68.19% decrease in aggregate holdings since May 2025.What was the market context for this transaction?
The purchase was executed at a weighted average price of $6.15 per share, slightly above the May 11, 2026 market close of $6.10, with LegalZoom.com shares down 35.2% year-over-year as of the transaction date.What is the impact on Stibel’s ownership structure?
The transaction increased direct holdings to 2,955,609 shares, while indirect holdings — primarily through entities such as Bryant-Stibel Fund I LLC and several trusts — remain at 6,461,127 shares, maintaining a split between direct and indirect control.Does this activity indicate a change in sentiment or capacity?
Given the lack of prior buy or sell trades and the large prior reduction in holdings, this purchase reflects both available capacity and a potential inflection point in Stibel's approach to LegalZoom.com equity exposure.Company overviewMetricValuePrice (as of market close May 11, 2026)$6.15Market capitalization$1.03 billionRevenue (TTM)$756.04 millionNet income (TTM)$15.43 million* 1-year performance is calculated using May 11, 2026 as the reference date.

Company snapshotLegalZoom.com offers an online platform for legal and compliance solutions, including business formations, estate planning, intellectual property protection, attorney access, and tax and bookkeeping services.The company serves small businesses and individual consumers seeking accessible, affordable legal and compliance solutions.LegalZoom.com operates at scale as a leading provider of online legal and compliance services, leveraging technology to streamline access to essential business and personal legal solutions.

The company’s strategy centers on simplifying complex legal processes and expanding its digital platform to capture demand from small businesses and individuals. LegalZoom.com’s competitive edge lies in its broad service portfolio, established brand, and ability to deliver cost-effective legal support nationwide.

What this transaction means for investorsLegalZoom CEO Jeffrey Stibel’s May 11 purchase of company shares is a noteworthy event for investors. Stibel already owned millions of shares. Therefore, his buy suggests he’s bullish on LegalZoom stock, and that the price had dropped to such an attractive level, he felt it made sense to add to his already plentiful position.

As a shareholder in the company, I agree with his move. LegalZoom stock was battered this year when Wall Street suddenly became fearful artificial intelligence could take away its business. This led to shares reaching a 52-week low of $5.28 on April 10.

The threat from AI is overblown. Legal matters are too important to trust to unproven AI solutions. Some law firms discovered this the hard way last year when they got in hot water for using AI to create court briefs, which cited legal cases that didn’t exist.

Moreover, LegalZoom’s business is healthy. Its first quarter sales grew 13% year over  year to $206.8 million. It raised 2026 full-year revenue guidance to a range between $810 million to $830 million, representing growth from 2025’s $756 million.

LegalZoom’s forward price-to-earnings ratio of six is about half what it was a year ago. This suggest shares are cheap, making now a good time to buy.

LegalZoom.com, Inc. (LZ) Presents at J.P. Morgan 54th Annual Global Technology, Media and Communications Conference Transcript