What Happened?
Shares of online legal service provider LegalZoom (NASDAQ: LZ) jumped 6.8% in the morning session after the company reported strong third-quarter financial results that beat revenue expectations and provided an encouraging outlook for the next quarter.
The online legal service provider posted revenue of $190.2 million, a 12.8% increase from the same period last year, which topped Wall Street's forecasts. Furthermore, the company's revenue guidance for the fourth quarter came in at $184 million at the midpoint, about 4% above what analysts were anticipating. While the company's GAAP earnings per share of $0.02 was in line with expectations, subscription units missed estimates. Despite the mixed results, investors focused on the better-than-expected revenue and strong forward-looking guidance.
Is now the time to buy LegalZoom? Access our full analysis report here.
What Is The Market Telling Us
LegalZoom’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 24 days ago when the stock gained 3.5% on the news that investors' concerns about US-China trade tensions were eased by President Trump's more conciliatory tone over the weekend. Following a sharp market drop the previous trading day driven by trade conflict escalation, Wall Street's main indexes opened significantly higher. The Dow Jones Industrial Average, S&P 500, and Nasdaq all saw gains of over 1%. The rebound was attributed to comments made by the President on social media, where he stated the "China situation will all be fine" and that the U.S. "wants to help China, not hurt it!!!" This shift in rhetoric prompted a return to risk assets, as traders brushed aside the previous week's fears. The rally ahead of the upcoming earnings season suggests that the "buy-the-dip" mentality remains strong among investors whenever trade jitters subside.
LegalZoom is up 42.9% since the beginning of the year, and at $10.81 per share, it is trading close to its 52-week high of $11.18 from August 2025. Investors who bought $1,000 worth of LegalZoom’s shares at the IPO in June 2021 would now be looking at an investment worth $285.47.
P.S. In tech investing, "Gorillas" are the rare companies that dominate their markets—like Microsoft and Apple did decades ago. Today, the next Gorilla is emerging in AI-powered enterprise software. Access the ticker here in our special report.
