Is LegalZoom’s (LZ) Raised Revenue Outlook Changing the Investment Story Amid Profit Challenges?

• LegalZoom.com, Inc. recently raised its full-year 2025 revenue guidance to a range of US$748 million to US$752 million and reported third-quarter sales of US$190.16 million, alongside an update on its ongoing share repurchase program.
• While the company saw robust sales growth, its net income declined year-over-year, highlighting both current operational momentum and ongoing profitability challenges.
• We'll explore how LegalZoom's upgraded revenue guidance shapes the company's future outlook and investment narrative amid mixed earnings results.

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LegalZoom.com Investment Narrative Recap

To be a shareholder in LegalZoom, you need to believe in the ongoing shift toward online legal solutions, the company's ability to grow recurring revenue, and management's execution despite industry disruption. LegalZoom's increased 2025 revenue guidance points to resilient near-term demand, but the persistence of profitability challenges, shown in falling net income, means the most important short-term catalyst remains further growth in high-margin subscription offerings, while the key risk is continued margin pressure from higher costs. This news does not materially change these core points.

Among recent announcements, LegalZoom’s update on its share repurchase program stands out. The company has now completed buybacks representing over 12.5% of outstanding shares, signaling confidence in long-term value amid a period where margin expansion remains a crucial trigger for sentiment and future performance.

In contrast, margin pressure linked to increased investment in higher-touch offerings remains a risk investors should be aware of if LegalZoom can’t offset those costs with...

Read the full narrative on LegalZoom.com (it's free!)

LegalZoom.com's narrative projects $876.4 million revenue and $72.3 million earnings by 2028. This requires 7.5% yearly revenue growth and a $43.5 million earnings increase from $28.8 million.

Uncover how LegalZoom.com's forecasts yield a $12.21 fair value, a 22% upside to its current price.

Exploring Other Perspectives

Four Simply Wall St Community estimates place LegalZoom's fair value between US$8.75 and US$29.41 per share. This wide span of opinions coincides with company efforts to offset cost pressures, shaping broader debate about LegalZoom’s profitability and growth potential.

Explore 4 other fair value estimates on LegalZoom.com - why the stock might be worth 13% less than the current price!

Build Your Own LegalZoom.com Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your LegalZoom.com research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free LegalZoom.com research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate LegalZoom.com's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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