On Wednesday, JPMorgan resumed coverage of LegalZoom.com Inc (NASDAQ:LZ), assigning an Overweight rating to the company's stock with a price target (PT) of $14.00. This new target reflects a decrease from the previous $17.00 price target.
LegalZoom, known for its online legal services, is recognized as a significant player in the business formation sector. The company facilitates the process for individuals to establish LLCs, non-profits, and corporations in a cost-effective and expedient manner. Currently, LegalZoom commands approximately a 10% share of the market volume in an industry where one-third of businesses are set up directly with the Secretary of State, another third through offline attorneys, and the remaining third via do-it-yourself (DIY) services.
The company's strategy aims to increase its market share to 30%, with a focus on offering higher-value, post-formation subscription services. These subscriptions encompass a range of offerings, including LZ Books for accounting and expense management, as well as access to tax and legal professionals.
In addition to its business formation services, LegalZoom also enjoys strong brand recognition for its family services, such as estate planning and name changes. This diverse portfolio positions the company well within the $49 billion U.S. addressable market, where LegalZoom currently has less than 1% penetration.
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