LEGALZOOMCOM INC (LZ) Stock Fundamental Analysis
NASDAQ:LZ - Nasdaq - US52466B1035 - Common Stock - Currency: USD
Taking everything into account, LZ scores 5 out of 10 in our fundamental rating. LZ was compared to 82 industry peers in the Professional Services industry. LZ has only an average score on both its financial health and profitability. LZ is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
LZ had positive earnings in the past year.
LZ had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: LZ reported negative net income in multiple years.
LZ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.02%, LZ is in the better half of the industry, outperforming 72.15% of the companies in the same industry.
Looking at the Return On Equity, with a value of 40.72%, LZ belongs to the top of the industry, outperforming 86.08% of the companies in the same industry.
LZ has a Return On Invested Capital of 41.30%. This is amongst the best in the industry. LZ outperforms 97.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.02% | ||
| ROE | 40.72% | ||
| ROIC | 41.3% |
ROA(3y)-11.37%
ROA(5y)-5.71%
ROE(3y)-26.98%
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With a Profit Margin value of 3.61%, LZ perfoms like the industry average, outperforming 51.90% of the companies in the same industry.
In the last couple of years the Profit Margin of LZ has grown nicely.
With a Operating Margin value of 5.87%, LZ perfoms like the industry average, outperforming 53.16% of the companies in the same industry.
LZ's Operating Margin has declined in the last couple of years.
LZ has a better Gross Margin (64.26%) than 74.68% of its industry peers.
LZ's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.87% | ||
| PM (TTM) | 3.61% | ||
| GM | 64.26% |
OM growth 3Y-30.38%
OM growth 5YN/A
PM growth 3Y11.34%
PM growth 5YN/A
GM growth 3Y-1.71%
GM growth 5YN/A
2. Health
2.1 Basic Checks
LZ has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
LZ has less shares outstanding than it did 1 year ago.
LZ has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.74, we must say that LZ is in the distress zone and has some risk of bankruptcy.
LZ has a worse Altman-Z score (0.74) than 74.68% of its industry peers.
There is no outstanding debt for LZ. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 0.74 |
ROIC/WACC4.56
WACC9.06%
2.3 Liquidity
A Current Ratio of 0.61 indicates that LZ may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.61, LZ is doing worse than 92.41% of the companies in the same industry.
LZ has a Quick Ratio of 0.61. This is a bad value and indicates that LZ is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of LZ (0.61) is worse than 91.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.61 |
3. Growth
3.1 Past
LZ shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.64%, which is quite impressive.
LZ shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 21.51% yearly.
LZ shows a small growth in Revenue. In the last year, the Revenue has grown by 4.50%.
The Revenue has been growing by 11.98% on average over the past years. This is quite good.
EPS 1Y (TTM)25.64%
EPS 3Y21.51%
EPS 5YN/A
EPS Q2Q%41.67%
Revenue 1Y (TTM)4.5%
Revenue growth 3Y11.98%
Revenue growth 5YN/A
Sales Q2Q%0.79%
3.2 Future
Based on estimates for the next years, LZ will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.55% on average per year.
LZ is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.01% yearly.
EPS Next Y27.66%
EPS Next 2Y16.99%
EPS Next 3Y13.75%
EPS Next 5Y15.55%
Revenue Next Year3.41%
Revenue Next 2Y2.84%
Revenue Next 3Y3.59%
Revenue Next 5Y10.01%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 17.69, the valuation of LZ can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of LZ indicates a somewhat cheap valuation: LZ is cheaper than 62.03% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.63, LZ is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 15.08, the valuation of LZ can be described as correct.
Based on the Price/Forward Earnings ratio, LZ is valued a bit cheaper than the industry average as 64.56% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of LZ to the average of the S&P500 Index (22.68), we can say LZ is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.69 | ||
| Fwd PE | 15.08 |
4.2 Price Multiples
LZ's Enterprise Value to EBITDA ratio is in line with the industry average.
65.82% of the companies in the same industry are more expensive than LZ, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.17 | ||
| EV/EBITDA | 19.14 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as LZ's earnings are expected to grow with 13.75% in the coming years.
PEG (NY)0.64
PEG (5Y)N/A
EPS Next 2Y16.99%
EPS Next 3Y13.75%
5. Dividend
5.1 Amount
LZ does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
8.67
-0.18 (-2.03%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners63.25%
Inst Owner Change-98.15%
Ins Owners1.13%
Ins Owner Change31.57%
Market Cap1.50B
Analysts51.11
Price Target8.36 (-3.58%)
Short Float %3.65%
Short Ratio2.91
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.08%
Min EPS beat(2)3.97%
Max EPS beat(2)12.19%
EPS beat(4)3
Avg EPS beat(4)7.24%
Min EPS beat(4)-9.39%
Max EPS beat(4)22.19%
EPS beat(8)6
Avg EPS beat(8)13.89%
EPS beat(12)9
Avg EPS beat(12)44.45%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-1.42%
Min Revenue beat(2)-2.26%
Max Revenue beat(2)-0.58%
Revenue beat(4)0
Avg Revenue beat(4)-1.97%
Min Revenue beat(4)-3.45%
Max Revenue beat(4)-0.58%
Revenue beat(8)2
Avg Revenue beat(8)-0.78%
Revenue beat(12)4
Avg Revenue beat(12)-0.99%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)20.59%
EPS NQ rev (1m)1.57%
EPS NQ rev (3m)-0.96%
EPS NY rev (1m)-0.64%
EPS NY rev (3m)1.15%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)0.05%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.69 | ||
| Fwd PE | 15.08 | ||
| P/S | 2.21 | ||
| P/FCF | 19.17 | ||
| P/OCF | 12.97 | ||
| P/B | 24.92 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.14 |
EPS(TTM)0.49
EY5.65%
EPS(NY)0.57
Fwd EY6.63%
FCF(TTM)0.45
FCFY5.22%
OCF(TTM)0.67
OCFY7.71%
SpS3.93
BVpS0.35
TBVpS-0.08
PEG (NY)0.64
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.02% | ||
| ROE | 40.72% | ||
| ROCE | 52.28% | ||
| ROIC | 41.3% | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | 5.87% | ||
| PM (TTM) | 3.61% | ||
| GM | 64.26% | ||
| FCFM | 11.52% |
ROA(3y)-11.37%
ROA(5y)-5.71%
ROE(3y)-26.98%
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y-30.38%
OM growth 5YN/A
PM growth 3Y11.34%
PM growth 5YN/A
GM growth 3Y-1.71%
GM growth 5YN/A
F-Score7
Asset Turnover1.95
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 114.76% | ||
| Cap/Sales | 5.51% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 159.56% | ||
| Profit Quality | 319.21% | ||
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.61 | ||
| Altman-Z | 0.74 |
F-Score7
WACC9.06%
ROIC/WACC4.56
Cap/Depr(3y)235.21%
Cap/Depr(5y)174.98%
Cap/Sales(3y)7.5%
Cap/Sales(5y)5.89%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)25.64%
EPS 3Y21.51%
EPS 5YN/A
EPS Q2Q%41.67%
EPS Next Y27.66%
EPS Next 2Y16.99%
EPS Next 3Y13.75%
EPS Next 5Y15.55%
Revenue 1Y (TTM)4.5%
Revenue growth 3Y11.98%
Revenue growth 5YN/A
Sales Q2Q%0.79%
Revenue Next Year3.41%
Revenue Next 2Y2.84%
Revenue Next 3Y3.59%
Revenue Next 5Y10.01%
EBIT growth 1Y94.39%
EBIT growth 3Y-22.04%
EBIT growth 5YN/A
EBIT Next Year152.6%
EBIT Next 3Y42.78%
EBIT Next 5Y34.93%
FCF growth 1Y306.82%
FCF growth 3Y4.38%
FCF growth 5YN/A
OCF growth 1Y151.22%
OCF growth 3Y10.14%
OCF growth 5YN/A