LegalZoom.com, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

It's been a good week for LegalZoom.com, Inc. (NASDAQ:LZ) shareholders, because the company has just released its latest yearly results, and the shares gained 6.3% to US$11.24. Revenues were US$661m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.07, an impressive 24% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for LegalZoom.com

Following the latest results, LegalZoom.com's seven analysts are now forecasting revenues of US$712.7m in 2024. This would be a modest 7.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 119% to US$0.16. Before this earnings report, the analysts had been forecasting revenues of US$714.5m and earnings per share (EPS) of US$0.14 in 2024. Although the revenue estimates have not really changed, we can see there's been a nice increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target was unchanged at US$13.64, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on LegalZoom.com, with the most bullish analyst valuing it at US$17.00 and the most bearish at US$10.50 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 7.9% growth on an annualised basis. That is in line with its 9.8% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.4% annually. It's clear that while LegalZoom.com's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around LegalZoom.com's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$13.64, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on LegalZoom.com. Long-term earnings power is much more important than next year's profits. We have forecasts for LegalZoom.com going out to 2026, and you can see them free on our platform here.

We also provide an overview of the LegalZoom.com Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.