LegalZoom.com, Inc. (NASDAQ:LZ) CFO Noel Bertram Watson has recently sold a portion of his company shares, according to the latest regulatory filings. The transactions, which occurred on May 16, 2024, involved the sale of 25,000 shares at a price of $9.44 per share, totaling $236,000.
The sale was conducted under a pre-arranged 10b5-1 trading plan, which allows company insiders to set up a predetermined plan to sell stocks at a time when they are not in possession of material non-public information. This plan had been adopted by Watson on May 24, 2023.
In addition to the sale, it was reported that Watson also disposed of 39,253 shares at a price of $9.49 each to satisfy tax withholding obligations associated with the vesting of restricted stock units (RSUs). This automatic withholding by the company is a common practice to cover the taxes due upon the vesting of RSUs, resulting in a total transaction value of $372,510.
Following these transactions, Watson still holds a significant number of shares in LegalZoom. According to the filing, his remaining ownership includes 748,912 shares directly held, which also accounts for 551,913 RSUs that are convertible into common stock and an additional 2,000 common stock shares acquired through the company's 2021 Employee Stock Purchase Plan.
Investors often monitor insider sales as they can provide insights into an executive's view of the company's current valuation and future prospects. However, it's important to note that selling shares may not necessarily indicate a lack of confidence in the company; insiders might sell shares for various reasons, such as diversifying their investment portfolio or other personal financial planning.
LegalZoom, headquartered in Mountain View, California, operates in the technology sector providing online legal solutions for small business owners and families. The transactions were officially filed with the Securities and Exchange Commission and are public information available for investor consideration.
InvestingPro Insights
Amid these recent insider transactions, LegalZoom.com Inc. (NASDAQ:LZ) presents a mixed financial outlook. According to InvestingPro, the company holds a market capitalization of approximately $1.7 billion USD, with a high price-to-earnings (P/E) ratio of 80.81, which adjusts to a slightly lower 70.63 when considering the last twelve months as of Q1 2024. This high P/E ratio is often indicative of investor expectations for future earnings growth or a company's strong current profitability.
One notable InvestingPro Tip is that LegalZoom has been aggressively buying back shares, which can be a signal of the management's confidence in the future of the company and often serves to increase shareholder value. Additionally, the company holds more cash than debt on its balance sheet, suggesting a solid financial position to weather economic uncertainties and invest in growth opportunities.
InvestingPro Data highlights that the company has an impressive gross profit margin of 62.92% for the last twelve months as of Q1 2024, which is a testament to its ability to manage costs and maintain profitability. However, the stock has taken a significant hit over the last week, with a price total return of -7.92%, and has fared poorly over the last month with a -23.48% return. This could potentially create a buying opportunity for investors, as the stock is also trading near its 52-week low.
For investors seeking additional insights, there are 17 more InvestingPro Tips available for LegalZoom, which can be accessed with a subscription. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing a more comprehensive understanding of the company's financial health and stock performance.
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