LegalZoom.com

Software - Application · Technology

Price

$7.72

-0.16 (-2.03%)

Market Cap

$1.33B

Exchange

NASDAQ

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Share count falling — buybacks

−6.8% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 198.1M (2021) → 184.7M (2025)

LegalZoom.com, Inc. operates an online platform for legal and compliance solutions in the United States. The company's platform offers products and services, including business formations, creating estate planning documents, protecting intellectual property, completing certain forms and agreements, providing access to independent attorney advice, and connecting customers with experts for tax preparation and bookkeeping services. It serves small businesses and individuals. LegalZoom.com, Inc. was

Winston Score History

Politician Trades

2 trades / 12mo

1 Congressional buy and 1 sell on LZ in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+12.9% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

-78.3% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$82M/ year

↓ Declining (-9% vs prior year)

10.8% of revenue

Below sector average (15%)

R&D spend declining — could signal cost-cutting or efficiency

Insider Activity

32.1%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$183M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

LegalZoom.com is a rare growth stock that's already generating positive cash flow while growing at 13%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

64.0%

Premium pricing power — 64.0% gross margin

Operating Margin

1.6%

Thin — 1.6% operating margin

ROCE

2.2%

Weak — 2.2% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+12.9%

Fast-growing sales (12.9% YoY)

EPS YoY

-62.3%

Earnings shrinking (-62.3% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency

0/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

1532%

Turns 1532% of profit into real cash

FCF Margin

18.9%

Converts sales into free cash efficiently (18.9%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.03

Conservative — low debt load (0.03)

Interest Cover

11.60x

Comfortably covers interest (11.6x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

120.8x

Expensive — P/E 120.8

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+111.5

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (120.8 → 9.3)

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Dividends

Not applicable for this business.

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