LegalZoom (LZ): Reassessing Valuation After Renewed Defy Ventures Partnership and Growing Social Impact

LegalZoom.com (LZ) drew fresh investor attention after renewing its partnership with Defy Ventures, a move that expands support for mental well being and entrepreneurship among formerly incarcerated individuals while reinforcing the company’s broader social impact strategy.

See our latest analysis for LegalZoom.com.

The renewed Defy Ventures partnership arrives as LegalZoom.com trades at $9.38, with a solid year to date share price return of 24.07 percent and a more modest 1 year total shareholder return of 14.39 percent. This suggests momentum is positive but cooling in the near term.

If this kind of mission driven growth story appeals to you, it could be a good moment to explore fast growing stocks with high insider ownership and see what other nimble operators are gaining traction.

Yet with shares still trading at a meaningful discount to analyst targets despite solid revenue and profit growth, investors now face a key question: Is LegalZoom undervalued, or is the market already pricing in that future growth?

Most Popular Narrative: 24.1% Undervalued

With LegalZoom.com last closing at $9.38 versus a narrative fair value of $12.36, the story focuses on whether its growth engine can keep compounding.

Strong momentum in high margin, recurring subscription offerings, especially within compliance and concierge do it for me products, signals continued growth in predictable revenues and improved customer retention, directly supporting higher net margins and earnings stability.

Read the complete narrative.

Want to see what powers that confidence? The narrative focuses on faster earnings, steadier margins, and a richer mix of recurring revenue than the market appears to expect.

Result: Fair Value of $12.36 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, it is worth remembering that fast evolving AI tools and rising price competition could undercut LegalZoom’s pricing power and long term subscription growth.

Find out about the key risks to this LegalZoom.com narrative.

Another View: Rich Multiples, Different Story

On simple earnings metrics, LegalZoom looks far less forgiving. At 74.8 times earnings versus 24.9 times for the US Professional Services industry and a peer average of 22.7 times, it also sits well above a 43.3 times fair ratio the market could eventually gravitate toward, leaving little room for missteps.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own LegalZoom.com Narrative

If this perspective does not fully resonate, or you would rather dive into the numbers yourself, you can build a fresh view in minutes: Do it your way.

A great starting point for your LegalZoom.com research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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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