LegalZoom.com, Inc. Just Recorded A 108% EPS Beat: Here's What Analysts Are Forecasting Next

LegalZoom.com, Inc. (NASDAQ:LZ) just released its latest second-quarter results and things are looking bullish. The company beat forecasts, with revenue of US$177m, some 2.6% above estimates, and statutory earnings per share (EPS) coming in at US$0.01, 108% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for LegalZoom.com

Following last week's earnings report, LegalZoom.com's seven analysts are forecasting 2024 revenues to be US$680.5m, approximately in line with the last 12 months. Statutory earnings per share are predicted to step up 16% to US$0.14. In the lead-up to this report, the analysts had been modelling revenues of US$683.7m and earnings per share (EPS) of US$0.16 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

The consensus price target held steady at US$7.17, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values LegalZoom.com at US$9.00 per share, while the most bearish prices it at US$6.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that LegalZoom.com's revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2024 being well below the historical 7.0% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.1% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than LegalZoom.com.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$7.17, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for LegalZoom.com going out to 2026, and you can see them free on our platform here..

You can also see our analysis of LegalZoom.com's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.