RingCentral (NYSE:RNG – Get Free Report) and LegalZoom.com (NASDAQ:LZ – Get Free Report) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, institutional ownership, risk and profitability.
Institutional & Insider Ownership
98.6% of RingCentral shares are held by institutional investors. Comparatively, 82.0% of LegalZoom.com shares are held by institutional investors. 6.8% of RingCentral shares are held by company insiders. Comparatively, 10.5% of LegalZoom.com shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Analyst Ratings
This is a breakdown of current ratings for RingCentral and LegalZoom.com, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| RingCentral | 0 | 8 | 7 | 1 | 2.56 |
| LegalZoom.com | 2 | 5 | 1 | 0 | 1.88 |
Volatility and Risk
RingCentral has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500. Comparatively, LegalZoom.com has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500.
Valuation and Earnings
This table compares RingCentral and LegalZoom.com’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| RingCentral | $2.31 billion | 1.35 | -$165.24 million | ($1.49) | -22.69 |
| LegalZoom.com | $677.51 million | 1.84 | $13.95 million | $0.11 | 60.09 |
LegalZoom.com has lower revenue, but higher earnings than RingCentral. RingCentral is trading at a lower price-to-earnings ratio than LegalZoom.com, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares RingCentral and LegalZoom.com’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| RingCentral | -5.75% | N/A | -1.22% |
| LegalZoom.com | 3.15% | 19.47% | 7.13% |
Summary
LegalZoom.com beats RingCentral on 10 of the 15 factors compared between the two stocks.
About RingCentral
RingCentral, Inc., together with its subsidiaries, provides cloud communications, video meetings, collaboration, and contact center software-as-a-service solutions worldwide. The company's products include RingCentral Message Video Phone that provides a unified experience for communication and collaboration across multiple modes, including HD voice, video, SMS, messaging and collaboration, conferencing, online meetings, and fax; RingCentral Contact Center, a collaborative contact center solution that delivers AI-powered omnichannel and workforce engagement solutions with integrated RingCentral MVP; and RingCX, an AI-powered contact center that a native delivers omnichannel experience. It provides RingCentral Video, a video meeting service that includes the company's RCV video and team messaging capabilities; offers video and audio conferencing, team messaging, file sharing, contact, task, and calendar management, as well as pre-meeting, in-meeting, and post-meeting capabilities. In addition, the company offers RingCentral Professional Services, which include consultation, UCaaS and CCaaS implementation, VoIP phone system adoption, configuring custom workflows, customer and user onboarding, ongoing support, advanced support, managed services, and more. It serves a range of industries, including financial services, education, healthcare, legal services, real estate, retail, technology, insurance, construction, hospitality, state and local government, and others. It sells its products to enterprise customers, as well as small and medium-sized businesses through resellers and distributors, partners, and global service providers. RingCentral, Inc. was incorporated in 1999 and is headquartered in Belmont, California.
About LegalZoom.com
LegalZoom.com, Inc., together with its subsidiaries, operates an online platform that supports the legal, compliance, and business management needs of small businesses and consumers in the United States. The company's platform offers business formation products, such as limited liability company, incorporation of C and S corporations, nonprofit formations, doing-business-as, corporate changes and filings, business licenses, legal forms, and beneficial ownership information reports; intellectual property products consisting of trademark and patent applications, and copyright registrations; and tax services, including business and personal tax preparations. It also provides consumer, estate planning, and other services comprising last will and testament, living will, living trust, power of attorney, and name change. In addition, the company offers subscriptions services, including registered agent, compliance, attorney advice, tax advice and preparation, eSignature, virtual mail and check deposit services, trademark monitoring, and estate planning bundle. The company was incorporated in 1999 and is headquartered in Glendale, California.
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