LZ
LegalZoom.com, Inc.
$6.36
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 61.0% below fair value
You pay
$6.36
Bear
$12.17
Fair
$16.31
Bull
$20.46
Bear
$12.17
+91.4%
7% stage 1 growth, 12% discount
Fair
$16.31
+156.5%
11% stage 1 growth, 12% discount
Bull
$20.46
+221.7%
14% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
35%
Implied Market Multiple
6.2x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $8.17 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $16.31 per share.
Warnings
Wall Street's average price target is $8.17 (from 12 analysts). Our estimate is 125% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions