Why LegalZoom Stock Was on Fire This Week
Key Points
Under the terms, the company will be the sole legal services provider within its partner's ecosystem.
This gives it a pool of more than 20 million potential clients.
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As a business that makes its coin by assisting with legal documents, it's appropriate that LegalZoom's (NASDAQ: LZ) stock has been rising over the past few days due to a contract it signed with a business partner.
Obviously encouraged by this deepening relationship, investors were snapping up LegalZoom shares. According to data compiled by S&P Global Market Intelligence, the stock rose nearly 16% over the week.
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The full force of the law
That partner is veteran online services company GoDaddy. LegalZoom announced on Thursday that it had become the sole legal services provider within GoDaddy's ecosystem.
Image source: Getty Images.
This puts LegalZoom in front of the more than 20.4 million customers GoDaddy claims to serve, according to the latter's fourth-quarter and full-year 2025 earnings release. Those users will have easy access to LegalZoom's popular company formation services, among other offerings.
"GoDaddy customers can now benefit from LegalZoom's guided formation flow and fast LLC filing speeds to get their business up and running as soon as possible, while enjoying peace of mind knowing that attorney guidance is available if they need it," LegalZoom wrote in its announcement.
No estimates given
What LegalZoom didn't provide was any estimates of how the new GoDaddy tie-up might impact its fundamentals. Regardless, any time a company can gain fairly easy exposure to tens of millions of potential clients, and within the universe of an enduring and popular tech services provider, we have to consider that a win.
I wouldn't necessarily buy LegalZoom stock on this deal alone. That said, if I were a shareholder, I'd consider it a positive development for the company and look forward to future collaborations with big businesses.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends GoDaddy. The Motley Fool has a disclosure policy.
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