Analysts Think LegalZoom Stock Can Double in 2026. Should You Buy It Here?

Average revenue per subscription unit (at period end) increased by 1% YOY to $266. LegalZoom’s subscription revenues continue to show robust growth, increasing by 20% from the prior-year period to $130.95 million. In fact, the company’s 2025 results reflected an emphasis on subscription initiatives and contributions from the Formation Nation acquisition.

However, LegalZoom’s margins have come under pressure. Its Q4 net income margin dropped from 8% to 3%. The company’s non-GAAP EPS was $0.17 for the quarter, down 11% YOY and lower than the $0.18 that analysts had expected.

For the current year, LegalZoom expects an 8% YOY revenue growth (at the midpoint of the guidance range), with a focus on higher-value customer acquisition and differentiated human-in-the-loop service offerings. However, this implies a step down from the 11% YOY growth observed in 2025.

On the other hand, Wall Street analysts expect LegalZoom’s profitability to improve this year. For fiscal 2026, analysts expect the company’s EPS to grow by 285.7% YOY to $0.27, followed by a 51.9% expansion to $0.41 in fiscal 2027.

Last month, JP Morgan’s analyst Ella Smith maintained an “Overweight” rating, but lowered its price target from $14 to $11. But, this still remains the Street-high price target. Just a couple of days later, analysts at UBS maintained a “Neutral” rating on LegalZoom’s stock but lowered its price target from $12 to $8, despite the company’s strong Q4 results, with four consecutive quarters of accelerating subscription revenue growth. However, the company’s fiscal 2026 revenue growth is projected to slow as improvements in average revenue per user take over from expansion in customer units.

LegalZoom is well-liked on Wall Street, with analysts awarding it a consensus “Moderate Buy” rating. Of the 11 analysts rating the stock, four analysts have given it a “Strong Buy” rating, while six analysts are taking the middle-of-the-road approach with a “Hold” rating, and one suggested “Moderate Sell.” The consensus price target of $9.14 represents a 30% upside from current levels. Moreover, as already stated, the Street-high JPMorgan-given price target of $11 implies a 56.5% upside.

The concerns about AI causing a downturn in software demand might be a bit overblown. We see that when it comes to LegalZoom, its subscription revenue keeps growing, and the integration of its attorney services into the Claude platform indicates that the company is leaning into the AI boom. Therefore, while the stock remains beaten down, it might be an opportune time to get in.

On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com