LegalZoom (LZ, Financial) stock experienced a significant uptick, increasing by 13.13% following a favorable analysis of its quarterly results. The company posted a revenue of $168.6 million, which modestly surpassed the analyst predictions of $167.5 million, marking a year-over-year growth of 1%.
LegalZoom's (LZ, Financial) subscription revenue saw a 5% increase to $110.7 million, reinforcing its strategic emphasis on securing a consistent income stream. However, transaction revenue witnessed a decline by 7%, settling at $57.9 million. The company demonstrated a substantial improvement in its non-GAAP net income, which surged by 27% to reach $29.7 million. This translates to earnings of $0.17 per share, exceeding the anticipated $0.15 per share.
Despite the positive earnings, LegalZoom (LZ, Financial) exhibits certain financial challenges. The stock's Price-to-Earnings (P/E) ratio stands at a high 83.82, suggesting that the stock may be overvalued compared to its earnings. Additionally, the company's Altman Z-score is in the distress zone at 0.61, implying potential bankruptcy risks within the next two years. The firm also faces a decline in revenue per share over the past three years.
Nevertheless, there are bright spots in LegalZoom's (LZ, Financial) financial outlook. The company boasts strong financial strength with a Piotroski F-Score of 7, indicating a robust financial health. Furthermore, its interest coverage ratio is comfortable, signaling a stable financial situation with adequate cash flow to manage debts.
Looking at the valuation from a GuruFocus perspective, LegalZoom (LZ, Financial) is deemed "Modestly Undervalued" with a GF Value of $12.08. This implies potential upside as the current stock price of $9.22 is below the calculated intrinsic value. Investors can refer to this GF Value for further insights.
For the 2024 fiscal year, LegalZoom (LZ, Financial) anticipates revenues between $678 million and $682 million, an increase from the previous year's figures. Analysts have predicted slightly over $681 million for the same period, aligning closely with the company’s outlook.
