Contrasting LegalZoom.com (NASDAQ:LZ) and Gartner (NYSE:IT)

LegalZoom.com (NASDAQ:LZ – Get Free Report) and Gartner (NYSE:IT – Get Free Report) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
LegalZoom.com 2.56% 23.63% 7.07%
Gartner 14.81% 2,287.71% 13.78%

Earnings & Valuation

This table compares LegalZoom.com and Gartner”s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LegalZoom.com $756.04 million 1.08 $15.43 million $0.12 41.29
Gartner $6.50 billion 1.87 $729.23 million $14.03 13.71

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

Risk and Volatility

LegalZoom.com has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, Gartner has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for LegalZoom.com and Gartner, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LegalZoom.com 3 5 0 0 1.62
Gartner 2 8 0 0 1.80

LegalZoom.com currently has a consensus target price of $6.12, indicating a potential upside of 23.61%. Gartner has a consensus target price of $206.20, indicating a potential upside of 7.16%. Given LegalZoom.com’s higher possible upside, analysts clearly believe LegalZoom.com is more favorable than Gartner.

Insider and Institutional Ownership

82.0% of LegalZoom.com shares are owned by institutional investors. Comparatively, 91.5% of Gartner shares are owned by institutional investors. 7.4% of LegalZoom.com shares are owned by company insiders. Comparatively, 2.6% of Gartner shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Gartner beats LegalZoom.com on 9 of the 13 factors compared between the two stocks.

About LegalZoom.com

(Get Free Report)

LegalZoom.com, Inc. provides online legal and compliance services to individuals and small businesses. Its platform helps customers complete common legal tasks through guided tools and access to professional services. Services include forming limited liability companies and corporations, registered agent services, business compliance support, trademark applications, and personal legal documents such as wills and estate plans. The company also offers access to attorneys for legal advice and assistance.

About Gartner

(Get Free Report)

Gartner, Inc. is a global research and advisory company that provides business and technology leaders with insights to support decision-making. Its research covers areas such as information technology, digital transformation, cybersecurity, finance, human resources, and supply chain management. The company offers research subscriptions, advisory services, consulting, and conferences. Its research includes tools and analysis such as Magic Quadrants and Hype Cycles, which help organizations assess markets, technologies, and potential vendors.

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