MOUNTAIN VIEW, Calif. - LegalZoom.com, Inc. (NASDAQ:LZ), a prominent online platform for small business formations, has expanded its stock repurchase program. The company's Board of Directors approved an additional $75 million for the buyback initiative, raising the total authorized amount to $175 million.
As of Monday, LegalZoom has repurchased roughly 5.9 million shares of its common stock at an average price of $10.10 per share, amounting to approximately $59 million. This leaves around $116 million available for future repurchases under the current authorization.
Dan Wernikoff, the CEO of LegalZoom, stated that this decision underscores the company's commitment to a balanced capital allocation strategy bolstered by robust cash generation. He highlighted the company's ability to invest in growth strategies and long-term product development while still providing returns to shareholders.
The repurchase program allows for stock buybacks through various methods, including open market transactions, accelerated stock repurchase agreements, or privately negotiated transactions, depending on market conditions, legal requirements, and corporate considerations. LegalZoom may also use Rule 10b5-1 plans for repurchasing shares.
The program, which has no set expiration date, does not require the company to purchase any specific number of shares and can be adjusted, paused, or stopped by the Board of Directors at any time.
LegalZoom has established itself as a leader in the U.S. for online business formation services. The company aims to support entrepreneurship by providing accessible legal, tax, and compliance products and expertise through user-friendly technology.
LegalZoom offers a range of services, from free business formations to comprehensive business management solutions and professional advisory services, supporting small business owners at every stage of their entrepreneurial journey.
This expansion of the stock repurchase program is based on a press release statement from LegalZoom.com, Inc.
InvestingPro Insights
LegalZoom.com, Inc. (NASDAQ:LZ) has demonstrated a proactive approach to capital management with its expanded stock repurchase program. Reflecting on this strategic move, InvestingPro data indicates a market capitalization of $1.6 billion USD, with a current Price to Earnings (P/E) ratio of 76.22.
This is noteworthy as it suggests a considerable premium placed on the company's earnings capacity. Nevertheless, the adjusted P/E ratio for the last twelve months as of Q1 2024 is slightly lower at 66.93, which may indicate a more favorable outlook on future earnings.
The company's Gross Profit Margin stands at a strong 62.92% for the same period, underscoring the effectiveness of LegalZoom's business model in generating revenue above the costs of goods sold. This impressive margin aligns with the company's focus on providing high-margin legal, tax, and compliance products and services.
Amid the company's stock buyback announcement, an InvestingPro Tip highlights that management has been aggressively buying back shares, which can be seen as a vote of confidence in the company's value and future prospects. Moreover, LegalZoom holds more cash than debt on its balance sheet, providing financial flexibility and stability, which is crucial for ongoing investments in growth and product development.
For investors seeking more detailed analysis, there are additional InvestingPro Tips available that further dissect LegalZoom's financial health and market position. For instance, the company is trading near its 52-week low and has experienced significant price declines over the past week and month. This context may offer a strategic entry point for investors believing in the company's long-term value proposition. To access these insights and more, visit InvestingPro and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. In total, there are 19 additional InvestingPro Tips available, providing a comprehensive analysis for informed decision-making.
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