LZ
LegalZoom.com, Inc.
$5.78
Platform & Compounding FCF
80%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 36.2% below fair value
You pay
$5.83
Bear
$7.01
Fair
$9.14
Bull
$11.24
Bear
$7.01
+20.2%
6% stage 1 growth, 11% discount
Fair
$9.14
+56.6%
10% stage 1 growth, 11% discount
Bull
$11.24
+92.6%
13% stage 1 growth, 11% discount
Adjust Assumptions
10.2%
11.0%
3.0%
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
13.0x
Market is pricing in (growth)
3.1%
vs 10.2% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (12 analysts)
$11.42
Divergence from AlphaVal
20%
Summary
Using a two-stage FCF DCF with 10% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $9.14 per share.
Warnings
Stock-based employee pay equals 737% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
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