Why Is LegalZoom.com (LZ) Surging on Analyst Recommendations?

We recently published a list of 5 Stocks Surging On Analyst Recommendations. In this article, we are going to take a look at where LegalZoom.com, Inc. (NASDAQ:LZ) stands against other stocks surging on analyst recommendations.

The US market is green today, reflecting the optimism of the market participants. Some stocks are outperforming the broader market based on analyst recommendations. These recommendations pertain to the stock prospects in 2025 as the economy heads for recovery in a monetary easing environment.

Analyst recommendations often come with insights on the stock based on extensive research by the analysts involved. Even though this research has its limitations and biases, it gives investors an idea of which stocks to bet on to outperform the market.

To come up with a list of stocks that are surging on analyst recommendations, we only considered stocks that received an analyst recommendation in the last 24 hours and have a market cap of at least $1 billion.

LegalZoom.com, Inc. (NASDAQ:LZ)

LegalZoom.com, Inc. (NASDAQ:LZ) operates an online platform in the United States. The platform supports small businesses and consumers in fulfilling their legal, compliance, and business management needs. Although the company showed poor performance in the first 10 months of 2024, the worst is over as things start improving for LZ.

LegalZoom.com (NASDAQ:LZ) started rising after receiving an upgrade from J.P Morgan from underweight to overweight, with the target price rising from $8 to $9. Adjusted EBITDA also received a boost, increasing to $167 million from $163 million.

The company is positioned for growth after changing to a software-driven subscription-based business model. As LZ is focusing on AI enhancements, high-potential customers and subscription-based products will likely drive growth and improve EBITDA margins above estimates in 2025.

Overall, LZ ranks 5th on our list of stocks surging on analyst recommendations. While we acknowledge the potential of LZ as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as LZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.