Earnings To Watch: LegalZoom (LZ) Reports Q1 Results Tomorrow

Anthony Lee /
2023/05/08 4:28 am EDT

Online legal service provider LegalZoom (NASDAQ:LZ) will be reporting earnings tomorrow after market hours. Here's what investors should know.

Last quarter LegalZoom reported revenues of $147.5 million, up 3.76% year on year, beating analyst revenue expectations by 1.06%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter andĀ full year. The company reported 1.44 million paying users, up 8.43% year on year.

Is LegalZoom buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting LegalZoom's revenue to grow 0.62% year on year to $155.2 million, slowing down from the 14.5% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.06 per share.

LegalZoom Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 2.26%.

Looking at LegalZoom's peers in the consumer internet segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Shutterstock delivered top-line growth of 8.11% year on year, beating analyst estimates by 1.77% and Teladoc reported revenues up 11.3% year on year, exceeding estimates by 1.78%. Shutterstock traded flat on the results, Teladoc was up 4.97%. Read our full analysis of Shutterstock's results here and Teladoc's results here.

The fears around raising interest rates have been putting pressure on tech stocks and while some of the consumer internet stocks have fared somewhat better, they have not been spared, with share price declining 4.85% over the last month. LegalZoom is down 20.1% during the same time, and is heading into the earnings with analyst price target of $11.6, compared to share price of $7.45.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.