Stock is ready to rally


The stock of online legal and compliance solutions platform LegalZoom (NYSE: LZ) is in price discovery mode after its recent IPO.

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August 3, 2021

4 minutes to read

This story originally appeared on MarketBeat

Online legal and compliance solutions platform LegalZoom (NYSE: LZ) the stock is in price discovery mode after its recent IPO. The two-decade-old Glendale, Calif., Company is a leading pioneer of the subscription model for legal forms, companiess compliance, trademarks and copyrights, and legal advice. The Company’s mission is to democratize the law with services such as business forms, constitution, wills, power of attorney forms, estate planning and IP protection. Rather than paying high fees to lawyers to use pre-defined documents, you can just sign up and have access to these common forms. The company has been around for two decades and continues to grow as more and more people go into running their own businesses and dealing with legal matters in a do it yourself (DIY) way. LegalZoom inaugurates the new normal which was sped up by COVID-19[female[feminine pushing forward e-commerce, digital acceptance, migration and innovation. Cautious investors looking for exposure can watch for timely pullbacks in LegalZoom stocks.

About LegalZoom

LegalZoom is a subscription service that provides legal software and services to small businesses and individuals. The company was founded in 2001 in Glendale, California. It revolutionized the legal services market by being one of the first companies to provide affordable and easily accessible technology to help clients create legal documents on their own. The competition includes RocketLawyer and LegalShield and obviously real lawyers and law firms. LegalZoom operated profitably until the last quarter. The Company generated $ 408 million in 2020 with operating income of $ 46 million. In 2020, the Company continued to grow revenues by 18% despite the pandemic to $ 470 million with $ 49 million in operating profit. In the first quarter of 2021, nearly 60% of new customers opted for the annual subscription on their first purchase. Average revenue per transaction was $ 488 in the first quarter of 2021. Revenue for the first quarter of 2021 increased 27% year-on-year to $ 134.8 million, equivalent to a rate of annual execution of approximately $ 540 million. However, the Company lost (- $ 4.4 million). The IPO was for 19.1 million shares between $ 24 and $ 27, which allows the Company to raise $ 535 million during the IPO. The shares actually opened at $ 36.75 when it went public on June 30, 2021. The Company plans to use the proceeds and the private placement to fully repay the outstanding debt of $ 523 million under its agreement. credit 2018.

Broker upgrades

On July 21, 2021, eight brokerage firms simultaneously launched the hedging of LegalZoom shares. Raymond James launched LegalZoom with a Market Perform rating. JMP Securities started off outperforming the market with a price target of $ 48. William Blair started off with an outperformance note. Credit Suisse started its hedging with an outperformance rating and a price target of $ 50. Morgan Stanley launched a cover with an equal weight rating and a price target of $ 44. Citigroup started out with a target of neutral price and $ 40. Barclays started off with an overweight rating and a price target of $ 45. Jeffries started coverage with a Hold odds and a price target of $ 39. On July 26, 2021, Credit Suisse raised the LegalZoom price target to $ 50 by stating, “In accordance with the methodology we use to assess our Internet coverage universe in the United States, our target price of $ 50 for LZ shares is based on the DCF which assumes a WACC of 11.5% and a terminal growth rate of 3%. Risks include competition with other online and offline solutions, slower-than-expected adoption of CMBs from online legal services, macroeconomic uncertainty and regulatory risk.

LZ opportunistic withdrawal levels

Using rifle cards over the daily period provides an accurate view of the price action for LZ stock. As this is a recent IPO, data is still accumulating to produce the indicators on the Guns Daily and Weekly Chart. However, the daily chart shows the basic indicators. Keep in mind that stocks always know the price discovery period until at least the release and reaction of the first earnings report. Daily gun chart peaked perfectly at $ 40.94 Fibonacci level (fib). The 5-period daily moving average (MA) fell to $ 35.90 fib. However, stocks attempted to wind up on the 15-period daily MA at $ 36.76 fib. The shares formed a sell trigger of the Daily High Market Structure (MSH) when breaking below $ 39.90. The corresponding daily weak market structure (MSL) buy triggered on the rising breakthrough $ 35.42. Risk tolerant investors can watch for opportunistic withdrawal levels at $ 34.67 fib, $ 33.93 fib, $ 33.65, and $ 32.74 fib. The upward trajectories range from the $ 39.90 level to the $ 43 level.

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