Critical Review: Wix.com (NASDAQ:WIX) and LZ Technology (NASDAQ:LZMH)

Wix.com (NASDAQ:WIX) and LZ Technology (NASDAQ:LZMH) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, valuation, dividends, institutional ownership and earnings.

Institutional and Insider Ownership

81.5% of Wix.com shares are held by institutional investors. 6.2% of Wix.com shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Wix.com and LZ Technology, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wix.com	1	2	19	2	2.92
LZ Technology	1	0	0	0	1.00

Wix.com currently has a consensus target price of $179.67, indicating a potential upside of 77.22%. Given Wix.com’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Wix.com is more favorable than LZ Technology.

Profitability

This table compares Wix.com and LZ Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wix.com	7.20%	-102.59%	7.98%
LZ Technology	N/A	N/A	N/A

Earnings & Valuation

This table compares Wix.com and LZ Technology”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wix.com	$1.76 billion	3.23	$138.32 million	$2.34	43.32
LZ Technology	N/A	N/A	N/A	N/A	N/A

Wix.com has higher revenue and earnings than LZ Technology.

Summary

Wix.com beats LZ Technology on 9 of the 10 factors compared between the two stocks.

About Wix.com

Wix.com Ltd., together with its subsidiaries, operates as a cloud-based web development platform for registered users and creators worldwide. The company offers Wix Editor, a drag-and-drop visual development and website editing environment platform; and Wix ADI that enables users to have the freedom of customization that the classic editor offers. It also provides Wix Logo Maker that generates a logo, including through the use of artificial intelligence; Wix Answers to support users; and Payments by Wix, a payment platform, which helps its users receive payments from their customers through their Wix Website. In addition, the company offers various vertical-specific applications that business owners use to operate various aspects of their business online. Further, it provides a range of complementary services, including Wix App Market, a marketplace that offers its registered users various free and paid web applications for building, growing, and managing their businesses; Wix marketplace that brings users seeking help in creating and managing a website together with Web experts; and Wix owner App, a native mobile application, which enables users to manage their Websites and Wix operating systems. The company was formerly known as Wixpress Ltd. The company was incorporated in 2006 and is headquartered in Tel Aviv, Israel.

About LZ Technology

As a holding company with no material operations of its own, LZ Technology conducts its operations through its operating entities formed in the PRC, primarily Lianzhang Portal and its subsidiaries. For the years ended December 31, 2022 and 2023, the Company had a total of 247 and 255 customers, respectively, who entered into contracts with the Company to purchase the Company’s products and services. For the six months ended June 30, 2024 and 2023, the Company had a total of 168 and 102 customers, respectively, who entered into contracts with the Company to purchase the Company’s products and services. The Company, however, has derived a large portion of its revenues from a few customers. For the years ended December 31, 2022 and 2023, the Company’s top three customers collectively accounted for approximately 84.4% and 24.5% of its total revenue, respectively. For the six months ended June 30, 2024, the Company’s top three customers collectively accounted for approximately 33.2% of its total revenue. The Company is an information technology and advertising company. Its operations are organized primarily into three business verticals: (i) Smart Community, (ii) Out-of-Home Advertising, and (iii) Local Life. Smart Community. The Company provides intelligent community building access and safety management systems through access control monitors and vendor-provided SaaS platforms. The Company’s intelligent community access control system makes resident access to properties simpler. As of June 30, 2024, approximately 72,773 of the Company’s access control screens had been installed in over 4,000 residential communities, serving over 2.7 million households. Out-of-Home Advertising. The Company offers clients one-stop multi-channel advertising solutions. Capitalizing on the Company’s network of monitors that span approximately 120 cities in China such as Shanghai, Beijing, Guangzhou, Shenzhen, Nanjing, Xiamen, Hefei, Dalian, Ningbo, Chengdu, Hangzhou, Wuhan, Chongqing, Changsha, the Company’s Out-of-Home Advertising services help merchants display advertisements in a variety of formats across its intelligent access control and safety management system. Advertisements are placed on the monitors and within the SaaS software. Residents are exposed to these advertisements each time they enter and exit community buildings or open the SaaS software. This level of visibility serves as a highly effective means of advertising, assisting merchants in effectively promoting their brands and accelerating their product sales. Moreover, the Company partners with other outdoor advertising providers to maximize coverage by placing the advertisements on the partners’ numerous displays in public transportation, hotels and other settings as well as deploying posters at events. This broad approach provides clients with a truly comprehensive out-of-home advertising solution. Local Life. The Company connects local businesses with consumers via online promotions and transactions. With its strong technological capabilities, the Company helps local restaurants, hotels, tourist companies, retail stores, cinemas and other merchants offer deals and coupons to consumers on social media platforms such as WeChat, Douyin (the Chinese version of TikTok) and RedNote. The Local Life vertical bridges the businesses’ need for product sales and promotions and the consumers’ need for dining, shopping, entertainment, tourist attractions and other local services. In addition, deals from local businesses can also be displayed on the access control screens. In this way, clients of the Company’s Local Life services can also reach the Smart Community residents, leveraging the Company’s access control screens’ extensive coverage and high exposure potential. Since early 2023, we have embarked on executing the strategy of deepening engagement with merchants and manufacturers within our Local Life space through facilitating retail sales of diversified goods and services, including beverages, groceries and travel packages. The Company reports financial results in one segment. Currently, a substantial portion of the Company’s revenues are generated from advertising and promotional activities, namely by the Out-of-Home Advertising and Local Life verticals. Revenues from Smart Community, which mainly consist of product sales of access control devices and service fees, contribute only a small portion to the Company’s total revenues. Thus, the Smart Community revenues are grouped with other miscellaneous revenue sources, such as advertising design and production and social media account operations. Our principal executive offices are located at Unit 311, Floor 3, No. 5999 Wuxing Avenue, Zhili Town, Wuxing District, Huzhou City, Zhejiang province, People’s Republic of China 313000. LZ Technology’s registered office is currently located at the office of Sertus Incorporations (Cayman) Limited, Sertus Chambers, Governors Square, Suite # 5-204, 23 Lime Tree Bay Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands, which may be changed from time to time at the discretion of directors. LZ Technology’s agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY.