LegalZoom.com, Inc.
LegalZoom.com, Inc. Fundamental Analysis
LegalZoom.com, Inc. (LZ) shows weak financial fundamentals with a PE ratio of 71.30, profit margin of 2.04%, and ROE of 8.17%. The company generates $0.8B in annual revenue with moderate year-over-year growth of 3.20%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 37.1/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze LZ's fundamental strength across five key dimensions:
Efficiency Score
WeakLZ struggles to generate sufficient returns from assets.
Valuation Score
ModerateLZ shows balanced valuation metrics.
Growth Score
WeakLZ faces weak or negative growth trends.
Financial Health Score
ModerateLZ shows balanced financial health with some risks.
Profitability Score
WeakLZ struggles to sustain strong margins.
Key Financial Metrics
Is LZ Expensive or Cheap?
P/E Ratio
LZ trades at 71.30 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, LZ's PEG of -2.56 indicates potential undervaluation.
Price to Book
The market values LegalZoom.com, Inc. at 6.40 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 16.21 times EBITDA. This signals the market has high growth expectations.
How Well Does LZ Make Money?
Net Profit Margin
For every $100 in sales, LegalZoom.com, Inc. keeps $2.04 as profit after all expenses.
Operating Margin
Core operations generate 3.48 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $8.17 in profit for every $100 of shareholder equity.
ROA
LegalZoom.com, Inc. generates $3.02 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
LegalZoom.com, Inc. produces operating cash flow of $177.91M, showing steady but balanced cash generation.
Free Cash Flow
LegalZoom.com, Inc. generates strong free cash flow of $147.68M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.83 in free cash annually.
FCF Yield
LZ converts 13.39% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
71.30
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-2.56
vs 25 benchmark
P/B Ratio
Price to book value ratio
6.40
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.45
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.08
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.76
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.08
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.14
vs 25 benchmark
How LZ Stacks Against Its Sector Peers
| Metric | LZ Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 71.30 | 26.49 | Worse (Expensive) |
| ROE | 8.17% | 1307.00% | Weak |
| Net Margin | 2.04% | -5131.00% (disorted) | Weak |
| Debt/Equity | 0.08 | 0.81 | Strong (Low Leverage) |
| Current Ratio | 0.76 | 10.48 | Weak Liquidity |
| ROA | 3.02% | -1549793.00% (disorted) | Weak |
LZ outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews LegalZoom.com, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
15.87%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
179.36%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
78.62%
Industry Style: Cyclical, Value, Infrastructure
High Growth