William Blair and JPMorgan Downgrade LegalZoom Stock

Investment firms William Blair and JPMorgan downgraded the stock rating of LegalZoom.com Inc following a reduction in the company's financial guidance. William Blair shifted its rating from Outperform to Market Perform, citing limited visibility into how the company will overcome search-related challenges. Specifically, the firm expressed concern over LegalZoom's ability to optimize for generative AI and answer engines, as well as uncertainty regarding future changes to Google's search functionality and monetization.

JPMorgan also downgraded the stock from Overweight to Neutral and lowered its price target to $7.00. This adjustment follows a revised fiscal 2026 revenue growth forecast of 6%, a decrease from the previous 8% estimate. LegalZoom currently expects fiscal 2026 revenue to fall between $795 million and $805 million.

These downgrades follow a recent move by LegalZoom to lower its revenue projections by 2% and earnings by 1%. While the company slightly missed revenue estimates, it beat second-quarter adjusted earnings expectations, reporting $0.16 per share.