LEGALZOOMCOM INC (LZ) Stock Fundamental Analysis
NASDAQ:LZ - Nasdaq - US52466B1035 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to LZ. LZ was compared to 81 industry peers in the Professional Services industry. LZ has an average financial health and profitability rating. LZ is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! This makes LZ very considerable for growth investing!
1. Profitability
1.1 Basic Checks
In the past year LZ was profitable.
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.
Each year in the past 5 years LZ had a positive operating cash flow.
1.2 Ratios
The Return On Assets of LZ (5.70%) is better than 62.96% of its industry peers.
The Return On Equity of LZ (16.21%) is better than 62.96% of its industry peers.
The Return On Invested Capital of LZ (11.88%) is better than 74.07% 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
LZ has a Profit Margin (4.39%) which is in line with its industry peers.
LZ's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 4.58%, LZ is in line with its industry, outperforming 48.15% of the companies in the same industry.
LZ's Operating Margin has declined in the last couple of years.
The Gross Margin of LZ (65.51%) is better than 77.78% of its industry peers.
LZ's Gross Margin has been stable in the last couple of years.
| 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
LZ has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
LZ has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, LZ has less shares outstanding
LZ has a better debt/assets ratio than last year.
2.2 Solvency
LZ has an Altman-Z score of 1.28. 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 1.28, LZ is doing worse than 69.14% 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 | 1.28 |
ROIC/WACC1.31
WACC9.05%
2.3 Liquidity
A Current Ratio of 0.77 indicates that LZ may have some problems paying its short term obligations.
The Current ratio of LZ (0.77) is worse than 85.19% of its industry peers.
A Quick Ratio of 0.77 indicates that LZ may have some problems paying its short term obligations.
LZ has a worse Quick ratio (0.77) than 85.19% 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.
LZ shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 40.44% yearly.
The Revenue has been growing slightly by 3.24% in the past year.
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
The Earnings Per Share is expected to grow by 12.68% on average over the next years. This is quite good.
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 Year5.17%
Revenue Next 2Y6.2%
Revenue Next 3Y6.36%
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.
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
With a Price/Earnings ratio of 14.85, LZ is valued correctly.
LZ's Price/Earnings ratio is a bit cheaper when compared to the industry. LZ is cheaper than 70.37% of the companies in the same industry.
When comparing the Price/Earnings ratio of LZ to the average of the S&P500 Index (26.57), we can say LZ is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 11.67, the valuation of LZ can be described as reasonable.
79.01% of the companies in the same industry are more expensive than LZ, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.41. LZ is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.85 | ||
| Fwd PE | 11.67 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as LZ.
LZ's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.19 | ||
| EV/EBITDA | 19.83 |
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.
A more expensive valuation may be justified as LZ's earnings are expected to grow with 14.62% in the coming years.
PEG (NY)0.72
PEG (5Y)0.37
EPS Next 2Y16.81%
EPS Next 3Y14.62%
5. Dividend
5.1 Amount
LZ does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
8.76
+0.02 (+0.23%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners64.36%
Inst Owner Change5.57%
Ins Owners0.56%
Ins Owner Change26.46%
Market Cap1.59B
Analysts51.11
Price Target9.61 (9.7%)
Short Float %5.74%
Short Ratio3.71
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)2.73%
PT rev (3m)0.89%
EPS NQ rev (1m)-0.09%
EPS NQ rev (3m)10.5%
EPS NY rev (1m)0%
EPS NY rev (3m)15.28%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)3.25%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.85 | ||
| Fwd PE | 11.67 | ||
| P/S | 2.3 | ||
| P/FCF | 23.19 | ||
| P/OCF | 10.43 | ||
| P/B | 8.48 | ||
| P/tB | 72.89 | ||
| EV/EBITDA | 19.83 |
EPS(TTM)0.59
EY6.74%
EPS(NY)0.75
Fwd EY8.57%
FCF(TTM)0.38
FCFY4.31%
OCF(TTM)0.84
OCFY9.59%
SpS3.81
BVpS1.03
TBVpS0.12
PEG (NY)0.72
PEG (5Y)0.37
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 | 1.28 |
F-Score7
WACC9.05%
ROIC/WACC1.31
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 Year5.17%
Revenue Next 2Y6.2%
Revenue Next 3Y6.36%
Revenue Next 5Y11.98%
EBIT growth 1Y1.01%
EBIT growth 3YN/A
EBIT growth 5Y-7.7%
EBIT Next Year48.14%
EBIT Next 3Y23.64%
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%