LegalZoom.com (NASDAQ:LZ) Issues Earnings Results, Meets Estimates

05 Nov 2026, 03:41 by Michael Walen · The Markets Daily

LegalZoom.com (NASDAQ:LZ – Get Free Report) issued its earnings results on Wednesday. The company reported $0.19 earnings per share (EPS) for the quarter, hitting analysts’ consensus estimates of $0.19, FiscalAI reports. LegalZoom.com had a return on equity of 15.83% and a net margin of 2.13%. The company had revenue of $195.15 million during the quarter, compared to analyst estimates of $193.83 million. During the same quarter last year, the business posted $0.17 EPS. The firm’s quarterly revenue was up 2.6% on a year-over-year basis.

Here are the key takeaways from LegalZoom.com’s conference call:

Third-quarter revenue rose 3% to $195 million, while adjusted EBITDA increased 8% to $50 million, a 26% margin. Subscription revenue grew 11% to $140 million, and human-in-the-loop subscriptions reached 49% of revenue, up approximately 17% year over year.
LegalZoom maintained its full-year revenue midpoint of $800 million but cut its adjusted EBITDA outlook to $180 million–$185 million, citing tougher customer-acquisition economics and targeted investments. Management expects transaction revenue to decline at a mid-teens rate in Q4.
Search headwinds weighed on transactions: revenue fell 14%, formations declined 13% to about 110,000, and transaction average order value dropped 12%. Subscription units were down 5%, although retention held steady at 57% and the subscription base grew slightly excluding certain lower-value products.
The company is investing in partnerships, affiliates, AI advertising, and expanded Business Manager services to diversify acquisition and build recurring customer relationships; those investments are pressuring near-term profitability. Management cited early traction, including doubled Q3 sales through Chase Offers versus Q2 and nearly 50% quarter-over-quarter growth in AI referral traffic, while noting AI volumes remain small.

LegalZoom.com Price Performance

LZ traded up $0.21 during trading hours on Wednesday, reaching $6.91. The company’s stock had a trading volume of 4,008,864 shares, compared to its average volume of 2,451,164. LegalZoom.com has a fifty-two week low of $5.22 and a fifty-two week high of $12.40. The business’s 50-day moving average is $6.16 and its 200-day moving average is $6.53. The stock has a market cap of $1.18 billion, a PE ratio of 76.72, a P/E/G ratio of 1.26 and a beta of 1.16.

Analyst Upgrades and Downgrades

Several research firms have commented on LZ. Wall Street Zen upgraded LegalZoom.com from a “hold” rating to a “buy” rating in a research report on Saturday, September 26th. JPMorgan Chase & Co. lowered shares of LegalZoom.com from an “overweight” rating to a “neutral” rating and cut their target price for the company from $8.00 to $7.00 in a report on Thursday, August 6th. Weiss Ratings downgraded shares of LegalZoom.com from a “hold (c-)” rating to a “sell (d+)” rating in a report on Thursday, October 29th. Finally, William Blair downgraded shares of LegalZoom.com from an “outperform” rating to a “market perform” rating in a report on Thursday, August 6th. Five analysts have rated the stock with a Hold rating and three have given a Sell rating to the company’s stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Reduce” and a consensus target price of $7.30.

Get Our Latest Stock Report on LZ

Key Stories Impacting LegalZoom.com

Here are the key news stories impacting LegalZoom.com this week:

Positive Sentiment: Third-quarter revenue was $195.15 million, above the $193.83 million estimate and up 2.6% year over year. EPS of $0.19 also increased from $0.17 a year earlier. MarketBeat earnings report
Neutral Sentiment: LegalZoom indicated adjusted EBITDA of $180 million to $185 million for fiscal 2026, while also citing pressure from search and targeted investments—factors investors may monitor for their effect on growth and costs. Seeking Alpha outlook report
Negative Sentiment: Shares fell sharply following the results. While EPS matched the $0.19 consensus cited by some reports, it missed Zacks’ $0.21 estimate. The modest 2.6% revenue growth and the company’s flagged search pressure and investments may have outweighed the sales beat. Zacks earnings report

Insider Activity

In related news, insider Nicole Miller sold 43,996 shares of the stock in a transaction that occurred on Monday, August 17th. The shares were sold at an average price of $5.51, for a total transaction of $242,417.96. Following the completion of the transaction, the insider owned 976,932 shares of the company’s stock, valued at approximately $5,382,895.32. This trade represents a 4.31% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Noel Watson sold 416,371 shares of LegalZoom.com stock in a transaction on Thursday, August 20th. The shares were sold at an average price of $5.91, for a total value of $2,460,752.61. Following the completion of the sale, the chief financial officer directly owned 1,491,430 shares of the company’s stock, valued at $8,814,351.30. The trade was a 21.82% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last ninety days, insiders have sold 577,475 shares of company stock valued at $3,375,197. 7.40% of the stock is currently owned by insiders.

About LegalZoom.com

(Get Free Report)

LegalZoom.com, Inc is an online platform that provides legal, compliance and tax-related products and services to individuals, families and small businesses. The company’s platform is designed to make common legal and administrative processes more accessible through digital tools, guided services and access to independent professionals.