Stock Track | LegalZoom Soars 9.6% in Pre-Market on Strong Q4 Earnings and Positive Outlook

Stock Track
27 Feb

LegalZoom.com, Inc (NASDAQ:LZ) stock surged 9.6% in the pre-market trading session on Thursday, following the company's impressive fourth-quarter earnings release and positive outlook for the upcoming year.

The key highlights from LegalZoom's Q4 2024 earnings report were:

  • Revenue of $162 million, at the high end of guidance, driven by a 2% growth in subscription revenue.
  • Adjusted EBITDA of $44 million, representing a strong 27% margin.
  • Free cash flow of $36 million, significantly higher than the previous year's $14 million.
  • Adjusted EBITDA for the full year 2024 increased by 25% to $148 million, with an improved margin of 22%.

While LegalZoom faced challenges such as a 15% decline in business formations and a higher mix of lower-priced transactions, the company's focus on optimizing its subscription business and the acquisition of Formation Nation are expected to contribute positively to future growth and profitability.

Analysts were also optimistic about LegalZoom's prospects, with William Blair reiterating a "Hold" rating on the stock, citing the company's growth potential and efforts to enhance its offerings through partnerships and acquisitions.

Additionally, LegalZoom's subsidiary, LZ Technology Holdings Limited, announced the pricing of its initial public offering (IPO) on the Nasdaq Capital Market, further boosting investor confidence in the company's overall business strategy.

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