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 80 industry peers in the Professional Services industry. Both the profitability and the financial health of LZ get a neutral evaluation. Nothing too spectacular is happening here. LZ is not overvalued while it is showing excellent growth. This is an interesting combination. These ratings would make LZ suitable 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
LZ's Return On Assets of 5.30% is fine compared to the rest of the industry. LZ outperforms 62.50% of its industry peers.
Looking at the Return On Equity, with a value of 14.82%, LZ is in the better half of the industry, outperforming 65.00% of the companies in the same industry.
With a decent Return On Invested Capital value of 9.86%, LZ is doing good in the industry, outperforming 66.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.3% | ||
| ROE | 14.82% | ||
| ROIC | 9.86% |
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 4.07%, LZ is in line with its industry, outperforming 55.00% of the companies in the same industry.
In the last couple of years the Profit Margin of LZ has grown nicely.
LZ's Operating Margin of 3.83% is in line compared to the rest of the industry. LZ outperforms 43.75% of its industry peers.
LZ's Operating Margin has declined in the last couple of years.
With a decent Gross Margin value of 65.71%, LZ is doing good in the industry, outperforming 77.50% of the companies in the same industry.
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 | 3.83% | ||
| PM (TTM) | 4.07% | ||
| GM | 65.71% |
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
The debt/assets ratio for LZ has been reduced compared to a year ago.
2.2 Solvency
LZ has an Altman-Z score of 1.93. This is not the best score and indicates that LZ is in the grey zone with still only limited risk for bankruptcy at the moment.
LZ's Altman-Z score of 1.93 is on the low side compared to the rest of the industry. LZ is outperformed by 61.25% 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 | 1.93 |
ROIC/WACC1.11
WACC8.91%
2.3 Liquidity
LZ has a Current Ratio of 0.78. 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 Current ratio of 0.78 is on the low side compared to the rest of the industry. LZ is outperformed by 83.75% of its industry peers.
A Quick Ratio of 0.78 indicates that LZ may have some problems paying its short term obligations.
LZ has a worse Quick ratio (0.78) than 83.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.78 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 45.45% 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.
LZ shows a small growth in Revenue. In the last year, the Revenue has grown by 4.19%.
Measured over the past years, LZ shows a quite strong growth in Revenue. The Revenue has been growing by 10.80% on average per year.
EPS 1Y (TTM)45.45%
EPS 3YN/A
EPS 5Y40.44%
EPS Q2Q%50%
Revenue 1Y (TTM)4.19%
Revenue growth 3Y5.84%
Revenue growth 5Y10.8%
Sales Q2Q%8.54%
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.
The Revenue is expected to grow by 11.98% on average over the next years. This is quite good.
EPS Next Y15.49%
EPS Next 2Y14.66%
EPS Next 3Y12.49%
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 17.33, LZ is valued on the expensive side.
Based on the Price/Earnings ratio, LZ is valued a bit cheaper than 65.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of LZ to the average of the S&P500 Index (26.41), we can say LZ is valued slightly cheaper.
The Price/Forward Earnings ratio is 15.34, which indicates a correct valuation of LZ.
Based on the Price/Forward Earnings ratio, LZ is valued a bit cheaper than 63.75% of the companies in the same industry.
LZ is valuated cheaply when we compare the Price/Forward Earnings ratio to 33.87, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.33 | ||
| Fwd PE | 15.34 |
4.2 Price Multiples
LZ's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. LZ is more expensive than 66.25% of the companies in the same industry.
LZ's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.41 | ||
| EV/EBITDA | 24.89 |
4.3 Compensation for Growth
LZ's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as LZ's earnings are expected to grow with 12.49% in the coming years.
PEG (NY)1.12
PEG (5Y)0.43
EPS Next 2Y14.66%
EPS Next 3Y12.49%
5. Dividend
5.1 Amount
LZ does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
11.09
+0.11 (+1%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners62.28%
Inst Owner Change1.49%
Ins Owners0.51%
Ins Owner Change12.75%
Market Cap2.01B
Analysts51.11
Price Target9.61 (-13.35%)
Short Float %7.52%
Short Ratio6.15
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)0
Avg EPS beat(2)-2.15%
Min EPS beat(2)-2.24%
Max EPS beat(2)-2.06%
EPS beat(4)2
Avg EPS beat(4)6%
Min EPS beat(4)-2.24%
Max EPS beat(4)16.09%
EPS beat(8)5
Avg EPS beat(8)8.87%
EPS beat(12)8
Avg EPS beat(12)11.17%
EPS beat(16)10
Avg EPS beat(16)29.68%
Revenue beat(2)2
Avg Revenue beat(2)1.35%
Min Revenue beat(2)0.41%
Max Revenue beat(2)2.3%
Revenue beat(4)2
Avg Revenue beat(4)-0.49%
Min Revenue beat(4)-2.4%
Max Revenue beat(4)2.3%
Revenue beat(8)3
Avg Revenue beat(8)-0.76%
Revenue beat(12)5
Avg Revenue beat(12)-0.45%
Revenue beat(16)6
Avg Revenue beat(16)-0.8%
PT rev (1m)0%
PT rev (3m)2.73%
EPS NQ rev (1m)0%
EPS NQ rev (3m)10.92%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.88%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.49%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.33 | ||
| Fwd PE | 15.34 | ||
| P/S | 2.85 | ||
| P/FCF | 24.41 | ||
| P/OCF | 12.25 | ||
| P/B | 10.35 | ||
| P/tB | 61.72 | ||
| EV/EBITDA | 24.89 |
EPS(TTM)0.64
EY5.77%
EPS(NY)0.72
Fwd EY6.52%
FCF(TTM)0.45
FCFY4.1%
OCF(TTM)0.91
OCFY8.16%
SpS3.9
BVpS1.07
TBVpS0.18
PEG (NY)1.12
PEG (5Y)0.43
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.3% | ||
| ROE | 14.82% | ||
| ROCE | 12.48% | ||
| ROIC | 9.86% | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | 3.83% | ||
| PM (TTM) | 4.07% | ||
| GM | 65.71% | ||
| FCFM | 11.66% |
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 | 184.92% | ||
| Cap/Sales | 11.58% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 230.34% | ||
| Profit Quality | 286.17% | ||
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.78 | ||
| Altman-Z | 1.93 |
F-Score7
WACC8.91%
ROIC/WACC1.11
Cap/Depr(3y)117.02%
Cap/Depr(5y)169.46%
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)45.45%
EPS 3YN/A
EPS 5Y40.44%
EPS Q2Q%50%
EPS Next Y15.49%
EPS Next 2Y14.66%
EPS Next 3Y12.49%
EPS Next 5Y12.68%
Revenue 1Y (TTM)4.19%
Revenue growth 3Y5.84%
Revenue growth 5Y10.8%
Sales Q2Q%8.54%
Revenue Next Year5.17%
Revenue Next 2Y6.2%
Revenue Next 3Y6.36%
Revenue Next 5Y11.98%
EBIT growth 1Y-3.7%
EBIT growth 3YN/A
EBIT growth 5Y-7.7%
EBIT Next Year48.23%
EBIT Next 3Y23.36%
EBIT Next 5Y22.36%
FCF growth 1Y-6.13%
FCF growth 3YN/A
FCF growth 5Y23.81%
OCF growth 1Y32.93%
OCF growth 3Y35.81%
OCF growth 5Y20.81%