Critical Analysis: LegalZoom.com (NASDAQ:LZ) & TELUS International (Cda) (NYSE:TIXT)

LegalZoom.com (NASDAQ:LZGet Rating) and TELUS International (Cda) (NYSE:TIXTGet Rating) are both industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.

Insider and Institutional Ownership

71.2% of LegalZoom.com shares are owned by institutional investors. Comparatively, 17.7% of TELUS International (Cda) shares are owned by institutional investors. 45.9% of LegalZoom.com shares are owned by insiders. Comparatively, 4.8% of TELUS International (Cda) shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for LegalZoom.com and TELUS International (Cda), as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LegalZoom.com 2 1 4 0 2.29
TELUS International (Cda) 0 4 6 0 2.60

LegalZoom.com presently has a consensus price target of $19.38, suggesting a potential upside of 112.68%. TELUS International (Cda) has a consensus price target of $27.70, suggesting a potential upside of 38.02%. Given LegalZoom.com’s higher possible upside, equities research analysts plainly believe LegalZoom.com is more favorable than TELUS International (Cda).

Profitability

This table compares LegalZoom.com and TELUS International (Cda)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LegalZoom.com -12.15% -38.19% -15.70%
TELUS International (Cda) 7.59% 17.02% 8.08%

Valuation and Earnings

This table compares LegalZoom.com and TELUS International (Cda)’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LegalZoom.com $575.08 million 3.05 -$108.66 million ($0.38) -23.97
TELUS International (Cda) $2.19 billion 2.43 $78.00 million $0.69 29.09

TELUS International (Cda) has higher revenue and earnings than LegalZoom.com. LegalZoom.com is trading at a lower price-to-earnings ratio than TELUS International (Cda), indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

LegalZoom.com has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, TELUS International (Cda) has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Summary

TELUS International (Cda) beats LegalZoom.com on 10 of the 14 factors compared between the two stocks.

About LegalZoom.com

(Get Rating)

LegalZoom.com, Inc. operates an online platform for legal and compliance solutions in the United States. The company's platform offers products and services, including business formations, creating estate planning documents, protecting intellectual property, completing certain forms and agreements, providing access to independent attorney advice, and connecting customers with experts for tax preparation and bookkeeping services. It serves small businesses and individuals. LegalZoom.com, Inc. was incorporated in 1999 and is headquartered in Glendale, California.

About TELUS International (Cda)

(Get Rating)

TELUS International (Cda) Inc. provides customer experience and digital business services in Europe, North America, the Asia-Pacific, and the Central America. It offers digital experience solutions, such as AI and bots, omnichannel CX, mobility solutions, cloud contact center, big data, platform transformation, and UX/UI design; and customer experience solutions, including work anywhere/work from home, customer care, technical support, sales growth and retention, and healthcare/patient experience. The company also provides IT lifecycle services comprising cloud and platform services, app dev and management, quality assurance and testing, system operations, IT service desk, internet of things, engineering solutions, and enterprise platform services; advisory services consisting of digital strategy, CX process consulting, data and customer analytics, workforce management, learning excellence solutions, and business and process transformation; robotic process automation, talent acquisition, finance and accounting, and supply chain management; and content moderation and social media, and fraud prevention and detection. It serves tech and games, communications and media, ecommerce and fintech, healthcare, and travel and hospitality industries. The company was founded in 2005 and is headquartered in Vancouver, Canada. TELUS International (Cda) Inc. is a subsidiary of TELUS Communications Inc.

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