What Happened:
Shares of online legal service provider LegalZoom (NASDAQ:LZ) jumped 17.3% in the after-market session after the company reported a "beat and raise" quarter. First quarter results exceeded analysts' revenue, adjusted EBITDA, and earnings per share (EPS) estimates. Business formations and transaction units, two usage KPIs, also beat. Revenue and adjusted EBITDA guidance for the next quarter were above Consensus, and the full-year revenue guidance was lifted. It was an impressive overall quarter for the company.
What is the market telling us:
LegalZoom's shares are quite volatile and over the last year have had 43 moves greater than 5%. But moves this big are very rare even for LegalZoom and that is indicating to us that this news had a significant impact on the market's perception of the business. The previous big move was 22 days ago, when the company gained 11.4% on the news that analyst Andrew Boone of JMP Securities upgraded the stock's rating from Market Perform (Hold) to Market Outperform (Buy). The analyst's $14 target price indicates a potential 37% gain from where the shares trade now.
LegalZoom is up 25.9% since the beginning of the year, but at $9.80 per share it is still trading 31.3% below its 52-week high of $14.26 from June 2022. Investors who bought $1,000 worth of LegalZoom's shares at the IPO in June 2021 would now be looking at an investment worth $262.88.
Is now the time to buy LegalZoom? Access our full analysis of the earnings results here, it's free.