In a report released today, Ella Smith from J.P. Morgan maintained a Buy rating on LegalZoom, with a price target of $14.00.
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Ella Smith has given her Buy rating due to a combination of factors that highlight LegalZoom’s strategic positioning and growth potential. The company is leveraging its unique blend of augmented intelligence and expert services to penetrate new markets, which is expected to significantly expand its addressable market from less than 0.5 million to over 30 million businesses in the U.S. This expansion is supported by LegalZoom’s ability to proactively identify and assist businesses that are out of compliance with various regulations, offering them tailored services to address these needs.
Furthermore, under the leadership of CEO Jeff Stibel, LegalZoom has shifted its focus towards building subscription revenue and diversifying its product offerings. This strategic pivot is aimed at reducing dependency on small business formations and tapping into ongoing compliance and legal needs. The company’s commitment to disciplined expense management, despite the costs associated with its new outreach methods, further solidifies its potential for sustainable growth. These factors, combined with a favorable valuation outlook, underpin Ella Smith’s confidence in LegalZoom’s stock, leading to the increased price target of $14 per share.