LegalZoom's Disappointing Earnings Lead to Stock Drop
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 20 2026
0mins
Should l Buy LZ?
Source: Fool
- Weak Revenue Growth: LegalZoom reported slightly over $190 million in revenue for Q4 2025, an 18% year-over-year increase, but fell short of analyst expectations, resulting in a nearly 7% stock drop in the following trading session.
- Subscription Revenue Performance: Subscription revenue rose by 20% to almost $131 million, while transaction revenue increased by 12% to just over $59 million, indicating some stability in the company's revenue structure despite overall disappointment.
- Net Income Decline: Despite revenue growth, LegalZoom's non-GAAP net income fell by 5% to $31 million, or $0.17 per share, missing analyst expectations of $0.18 per share, reflecting pressure on profitability.
- Cautious Future Outlook: The company forecasts 2026 revenue between $805 million and $825 million, representing a maximum growth of 9%, while expanding its share repurchase program by $100 million, indicating a cautious approach to future growth prospects.
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Analyst Views on LZ
Wall Street analysts forecast LZ stock price to rise
7 Analyst Rating
4 Buy
2 Hold
1 Sell
Moderate Buy
Current: 7.030
Low
9.00
Averages
12.42
High
15.00
Current: 7.030
Low
9.00
Averages
12.42
High
15.00
About LZ
LegalZoom.com, Inc. provides an online platform for legal services, transforming how individuals and small businesses navigate the legal system. The Company offers the tools and guidance people need to confidently manage everything from business formation and compliance to estate planning and ongoing legal support. Its platform includes professional expertise and other products, both legal and non-legal, to meet the needs of small businesses. Its offerings include ongoing compliance, business licenses, accounting, virtual mailbox and e-signature solutions, trademark filings, and estate plans. Its transaction products for small businesses include business formation and intellectual property. Its transaction products for consumers include consumer, estate planning and other. Its compliance subscriptions provide assistance with state-mandated regulatory filings, such as corporate annual reports. The Company operates across 50 states and in over 3,000 counties in the United States.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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