LegalZoom, the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Mike McGovern from Bank of America Securities reiterated a Buy rating on the stock and has a $14.00 price target.
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Mike McGovern has given his Buy rating due to a combination of factors including LegalZoom’s strong financial performance and strategic initiatives. LegalZoom reported higher than expected revenue and gross profit for the third quarter, with significant growth in formations and EBITDA. The company’s management has successfully implemented a turnaround strategy that targets larger businesses and expands focus areas beyond formations, introducing new concierge products.
Additionally, LegalZoom’s expanded collaboration with OpenAI into a full enterprise deal is expected to enhance product integration and cost efficiency, while also developing new growth opportunities. The company’s guidance for the fourth quarter suggests accelerating revenue growth, and its potential role in providing legal tools for large language models further supports its growth prospects. Consequently, McGovern has raised the growth estimates and applied a higher EBITDA multiple for the price objective, reflecting LegalZoom’s improving growth profile.
McGovern covers the Consumer Cyclical sector, focusing on stocks such as DoorDash, Carvana Co, and CarMax. According to TipRanks, McGovern has an average return of 7.2% and a 48.51% success rate on recommended stocks.