Analyzing Five9 (NASDAQ:FIVN) and LegalZoom.com (NASDAQ:LZ)

Five9 (NASDAQ:FIVN) and LegalZoom.com (NASDAQ:LZ) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, institutional ownership, earnings and risk.

Profitability

This table compares Five9 and LegalZoom.com’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Five9	-3.66%	-1.53%	-0.44%
LegalZoom.com	3.61%	32.88%	9.31%

Valuation and Earnings

This table compares Five9 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
Five9	$910.49 million	3.38	-$81.76 million	($0.50)	-81.94
LegalZoom.com	$660.73 million	2.07	$13.95 million	$0.13	60.85

LegalZoom.com has lower revenue, but higher earnings than Five9. Five9 is trading at a lower price-to-earnings ratio than LegalZoom.com, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for Five9 and LegalZoom.com, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Five9	0	5	14	0	2.74
LegalZoom.com	2	5	1	0	1.88

Five9 presently has a consensus target price of $59.22, suggesting a potential upside of 44.55%. LegalZoom.com has a consensus target price of $8.67, suggesting a potential upside of 9.57%. Given Five9’s stronger consensus rating and higher possible upside, analysts plainly believe Five9 is more favorable than LegalZoom.com.

Volatility & Risk

Five9 has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, LegalZoom.com has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Insider & Institutional Ownership

96.6% of Five9 shares are owned by institutional investors. Comparatively, 82.0% of LegalZoom.com shares are owned by institutional investors. 1.8% of Five9 shares are owned by company insiders. Comparatively, 10.5% of LegalZoom.com shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

LegalZoom.com beats Five9 on 8 of the 14 factors compared between the two stocks.

About Five9

Five9, Inc., together with its subsidiaries, provides intelligent cloud software for contact centers in the United States, India, and internationally. It offers a virtual contact center cloud platform that delivers a suite of applications, which enables the breadth of contact center-related customer service, sales, and marketing functions. The company’s platform comprises of including interactive virtual agent, agent assist, workflow automation, workforce engagement management, AI insights, and AI summaries that allows to manage and optimize customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces. It also matches each customer interaction with an agent resource and delivers customer data to the agent in real-time through integrations with adjacent enterprise applications, such as CRM software, to optimize the customer experience and enhance agent productivity. The company serves customers in various industries, such as banking and financial services, business process outsourcers, retail, healthcare, technology, and education. Five9, Inc. was incorporated in 2001 and is headquartered in San Ramon, 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 Mountain View, California.