Analyzing LegalZoom.com (NASDAQ:LZ) and CSG Systems International (NASDAQ:CSGS)

LegalZoom.com (NASDAQ:LZ) and CSG Systems International (NASDAQ:CSGS) are both small-cap industrial products companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Earnings and Valuation

This table compares LegalZoom.com and CSG Systems International’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LegalZoom.com	$660.73 million	2.39	$13.95 million	$0.11	76.28
CSG Systems International	$1.17 billion	1.05	$66.25 million	$2.19	18.80

CSG Systems International has higher revenue and earnings than LegalZoom.com. CSG Systems International 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 LegalZoom.com and CSG Systems International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LegalZoom.com	3.15%	19.47%	7.13%
CSG Systems International	5.56%	28.77%	6.37%

Analyst Ratings

This is a summary of recent recommendations and price targets for LegalZoom.com and CSG Systems International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LegalZoom.com	1	1	4	0	2.50
CSG Systems International	0	1	4	0	2.80

LegalZoom.com currently has a consensus target price of $14.75, suggesting a potential upside of 75.80%. CSG Systems International has a consensus target price of $61.67, suggesting a potential upside of 49.79%. Given LegalZoom.com’s higher probable upside, equities research analysts plainly believe LegalZoom.com is more favorable than CSG Systems International.

Risk and Volatility

LegalZoom.com has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, CSG Systems International has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Institutional & Insider Ownership

82.0% of LegalZoom.com shares are held by institutional investors. Comparatively, 91.1% of CSG Systems International shares are held by institutional investors. 10.5% of LegalZoom.com shares are held by insiders. Comparatively, 3.1% of CSG Systems International shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

CSG Systems International beats LegalZoom.com on 7 of the 13 factors compared between the two stocks.

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.

About CSG Systems International

CSG Systems International, Inc., together with its subsidiaries, provides revenue management and digital monetization, customer experience, and payment solutions primarily to the communications industry in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers Advanced Convergent Platform, a private SaaS platform; and related solutions, including service technician management, analytics, electronic bill presentment, etc. The company also provides a public SaaS-based revenue management and payments platform. In addition, it offers managed services; and professional services to implement, configure, and maintain its solutions, as well as licenses various solutions, such as mediation, partner management, rating, and charging. Further, the company provides operational services, including infrastructure management comprised of hardware, application, and environmental management; application configuration management, such as configuration development, release, and deployment; and business operations management, which includes event processing, revenue management, and settlement. It serves retail, financial services, healthcare, insurance, and government entities. The company was incorporated in 1994 and is headquartered in Englewood, Colorado.