LZ
LegalZoom.com, Inc.
$8.08
Platform & Compounding FCF
80%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 3.0% below fair value
You pay
$8.08
Bear
$6.37
Fair
$8.33
Bull
$10.29
Bear
$6.37
-21.2%
7% stage 1 growth, 12% discount
Fair
$8.33
+3.1%
11% stage 1 growth, 12% discount
Bull
$10.29
+27.4%
14% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
35%
Implied Market Multiple
19.3x
Market is pricing in (growth)
10.3%
vs 10.9% base
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 $8.33 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