LEGALZOOMCOM INC (LZ) Stock Fundamental Analysis
NASDAQ:LZ - Nasdaq - US52466B1035 - Common Stock - Currency: USD
LZ gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 82 industry peers in the Professional Services industry. LZ has only an average score on both its financial health and profitability. LZ is not overvalued while it is showing excellent growth. This is an interesting combination. This makes LZ very considerable for growth investing!
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
With a decent Return On Assets value of 5.70%, LZ is doing good in the industry, outperforming 62.20% of the companies in the same industry.
LZ has a Return On Equity of 16.21%. This is in the better half of the industry: LZ outperforms 62.20% of its industry peers.
The Return On Invested Capital of LZ (11.88%) is better than 71.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.7% | ||
| ROE | 16.21% | ||
| ROIC | 11.88% |
ROA(3y)-0.29%
ROA(5y)-4.65%
ROE(3y)2.06%
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 4.39%, LZ is in line with its industry, outperforming 56.10% of the companies in the same industry.
LZ's Profit Margin has improved in the last couple of years.
LZ has a Operating Margin (4.58%) which is in line with its industry peers.
LZ's Operating Margin has declined in the last couple of years.
LZ has a better Gross Margin (65.51%) than 76.83% of its industry peers.
In the last couple of years the Gross Margin of LZ has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.58% | ||
| PM (TTM) | 4.39% | ||
| GM | 65.51% |
OM growth 3YN/A
OM growth 5Y-16.69%
PM growth 3YN/A
PM growth 5Y27.15%
GM growth 3Y-1.14%
GM growth 5Y-0.51%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), LZ is creating some value.
LZ has less shares outstanding than it did 1 year ago.
LZ has less shares outstanding than it did 5 years ago.
The debt/assets ratio for LZ has been reduced compared to a year ago.
2.2 Solvency
LZ has an Altman-Z score of 1.58. This is a bad value and indicates that LZ is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.58, LZ is doing worse than 67.07% of the companies in the same industry.
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 | 1.58 |
ROIC/WACC1.3
WACC9.12%
2.3 Liquidity
LZ has a Current Ratio of 0.77. This is a bad value and indicates that LZ is not financially healthy enough and could expect problems in meeting its short term obligations.
LZ has a Current ratio of 0.77. This is amonst the worse of the industry: LZ underperforms 85.37% of its industry peers.
LZ has a Quick Ratio of 0.77. This is a bad value and indicates that LZ is not financially healthy enough and could expect problems in meeting its short term obligations.
LZ's Quick ratio of 0.77 is on the low side compared to the rest of the industry. LZ is outperformed by 84.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.77 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 34.09% over the past year.
Measured over the past years, LZ shows a very strong growth in Earnings Per Share. The EPS has been growing by 40.44% on average per year.
LZ shows a small growth in Revenue. In the last year, the Revenue has grown by 3.24%.
LZ shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.80% yearly.
EPS 1Y (TTM)34.09%
EPS 3YN/A
EPS 5Y40.44%
EPS Q2Q%44.44%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y5.84%
Revenue growth 5Y10.8%
Sales Q2Q%5.11%
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 12.68% on average per year.
LZ is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.98% yearly.
EPS Next Y20.49%
EPS Next 2Y16.81%
EPS Next 3Y14.62%
EPS Next 5Y12.68%
Revenue Next Year5.12%
Revenue Next 2Y5.89%
Revenue Next 3Y6.38%
Revenue Next 5Y11.98%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
LZ is valuated correctly with a Price/Earnings ratio of 15.98.
LZ's Price/Earnings ratio is a bit cheaper when compared to the industry. LZ is cheaper than 65.85% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.03, LZ is valued a bit cheaper.
The Price/Forward Earnings ratio is 12.57, which indicates a correct valuation of LZ.
Based on the Price/Forward Earnings ratio, LZ is valued a bit cheaper than the industry average as 75.61% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of LZ to the average of the S&P500 Index (21.94), we can say LZ is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.98 | ||
| Fwd PE | 12.57 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as LZ.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of LZ indicates a somewhat cheap valuation: LZ is cheaper than 60.98% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.97 | ||
| EV/EBITDA | 22.37 |
4.3 Compensation for Growth
LZ's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
LZ's earnings are expected to grow with 14.62% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.78
PEG (5Y)0.4
EPS Next 2Y16.81%
EPS Next 3Y14.62%
5. Dividend
5.1 Amount
No dividends for LZ!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
9.43
-0.28 (-2.88%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners63.25%
Inst Owner Change5.03%
Ins Owners1.13%
Ins Owner Change25.88%
Market Cap1.71B
Analysts73.33
Price Target9.35 (-0.85%)
Short Float %6.02%
Short Ratio3.35
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)1
Avg EPS beat(2)6.93%
Min EPS beat(2)-2.24%
Max EPS beat(2)16.09%
EPS beat(4)3
Avg EPS beat(4)7.5%
Min EPS beat(4)-2.24%
Max EPS beat(4)16.09%
EPS beat(8)5
Avg EPS beat(8)8.99%
EPS beat(12)9
Avg EPS beat(12)32.53%
EPS beat(16)11
Avg EPS beat(16)33.61%
Revenue beat(2)1
Avg Revenue beat(2)-1%
Min Revenue beat(2)-2.4%
Max Revenue beat(2)0.41%
Revenue beat(4)1
Avg Revenue beat(4)-1.21%
Min Revenue beat(4)-2.4%
Max Revenue beat(4)0.41%
Revenue beat(8)2
Avg Revenue beat(8)-1.28%
Revenue beat(12)4
Avg Revenue beat(12)-0.83%
Revenue beat(16)6
Avg Revenue beat(16)-0.7%
PT rev (1m)-5.17%
PT rev (3m)11.79%
EPS NQ rev (1m)0.68%
EPS NQ rev (3m)10.61%
EPS NY rev (1m)2.37%
EPS NY rev (3m)15.28%
Revenue NQ rev (1m)0.34%
Revenue NQ rev (3m)3.27%
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)2.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.98 | ||
| Fwd PE | 12.57 | ||
| P/S | 2.47 | ||
| P/FCF | 24.97 | ||
| P/OCF | 11.23 | ||
| P/B | 9.13 | ||
| P/tB | 78.46 | ||
| EV/EBITDA | 22.37 |
EPS(TTM)0.59
EY6.26%
EPS(NY)0.75
Fwd EY7.96%
FCF(TTM)0.38
FCFY4.01%
OCF(TTM)0.84
OCFY8.91%
SpS3.81
BVpS1.03
TBVpS0.12
PEG (NY)0.78
PEG (5Y)0.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.7% | ||
| ROE | 16.21% | ||
| ROCE | 15.04% | ||
| ROIC | 11.88% | ||
| ROICexc | 12611.3% | ||
| ROICexgc | N/A | ||
| OM | 4.58% | ||
| PM (TTM) | 4.39% | ||
| GM | 65.51% | ||
| FCFM | 9.91% |
ROA(3y)-0.29%
ROA(5y)-4.65%
ROE(3y)2.06%
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 3YN/A
OM growth 5Y-16.69%
PM growth 3YN/A
PM growth 5Y27.15%
GM growth 3Y-1.14%
GM growth 5Y-0.51%
F-Score7
Asset Turnover1.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 222.29% | ||
| Cap/Sales | 12.12% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 219.64% | ||
| Profit Quality | 225.49% | ||
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.77 | ||
| Altman-Z | 1.58 |
F-Score7
WACC9.12%
ROIC/WACC1.3
Cap/Depr(3y)122.96%
Cap/Depr(5y)173.03%
Cap/Sales(3y)5%
Cap/Sales(5y)6.04%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)34.09%
EPS 3YN/A
EPS 5Y40.44%
EPS Q2Q%44.44%
EPS Next Y20.49%
EPS Next 2Y16.81%
EPS Next 3Y14.62%
EPS Next 5Y12.68%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y5.84%
Revenue growth 5Y10.8%
Sales Q2Q%5.11%
Revenue Next Year5.12%
Revenue Next 2Y5.89%
Revenue Next 3Y6.38%
Revenue Next 5Y11.98%
EBIT growth 1Y1.01%
EBIT growth 3YN/A
EBIT growth 5Y-7.7%
EBIT Next Year47.87%
EBIT Next 3Y23.7%
EBIT Next 5Y22.36%
FCF growth 1Y22.41%
FCF growth 3YN/A
FCF growth 5Y23.81%
OCF growth 1Y70.38%
OCF growth 3Y35.81%
OCF growth 5Y20.81%