Head-To-Head Analysis: LegalZoom.com (NASDAQ:LZ) & 8X8 (NASDAQ:EGHT)

8X8 (NASDAQ:EGHT) and LegalZoom.com (NASDAQ:LZ) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.

Analyst Recommendations

This is a breakdown of recent recommendations for 8X8 and LegalZoom.com, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
8X8	2	1	3	0	2.17
LegalZoom.com	2	5	1	0	1.88

8X8 currently has a consensus price target of $2.83, suggesting a potential upside of 56.54%. LegalZoom.com has a consensus price target of $9.93, suggesting a potential upside of 56.36%. Given 8X8’s stronger consensus rating and higher possible upside, equities analysts plainly believe 8X8 is more favorable than LegalZoom.com.

Risk & Volatility

8X8 has a beta of 1.56, meaning that its stock price is 56% more volatile than the S&P 500. Comparatively, LegalZoom.com has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.

Profitability

This table compares 8X8 and LegalZoom.com’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
8X8	-9.28%	-7.40%	-0.98%
LegalZoom.com	3.15%	19.47%	7.13%

Valuation and Earnings

This table compares 8X8 and LegalZoom.com’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
8X8	$723.57 million	0.31	-$67.59 million	($0.55)	-3.29
LegalZoom.com	$677.51 million	1.76	$13.95 million	$0.11	57.73

LegalZoom.com has lower revenue, but higher earnings than 8X8. 8X8 is trading at a lower price-to-earnings ratio than LegalZoom.com, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

94.0% of 8X8 shares are held by institutional investors. Comparatively, 82.0% of LegalZoom.com shares are held by institutional investors. 1.1% of 8X8 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, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

LegalZoom.com beats 8X8 on 8 of the 14 factors compared between the two stocks.

About 8X8

8×8, Inc. provides voice, video, chat, contact center, and enterprise-class application programmable interface (API) Software-as-a-Service solutions for small business, mid-market, enterprise customers, government agencies, and other organizations worldwide. It offers 8×8 Work, a self-contained end-to-end united communications solution that delivers voice services, secure video meetings, and unified messaging, including direct messages, public and private team messaging rooms, and peer-to-peer short and multimedia messaging; 8×8 Contact Center, a cloud-based contact center as-a-service solution; and 8×8 Engage, an artificial intelligence-powered solution that equips customer-facing employees outside the contact center with the tools and capabilities to deliver successful customer engagements. The company also provides 8×8 Communications Platform as-a-Service, a communications platform-as-a-service capabilities that enable businesses to directly integrate its platform services within their websites, mobile apps, and business systems for personalized customer engagement; and Solutions for Microsoft Teams. In addition, it offers and X1 through X4 and X5 through X8, which provide enterprise-grade voice, unified communications, and video meetings and team collaboration, and contact center solutions. The company markets its services to end users through industry conferences, trade shows, webinars, and local and digital advertising channels. 8×8, Inc. was incorporated in 1987 and is headquartered in Campbell, 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.