TeleTech (NASDAQ:TTEC) versus LegalZoom.com (NASDAQ:LZ) Financial Review

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for LegalZoom.com and TeleTech, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LegalZoom.com	4	5	0	0	1.56
TeleTech	1	2	0	0	1.67

LegalZoom.com currently has a consensus price target of $7.10, suggesting a potential upside of 35.50%. Given LegalZoom.com’s higher probable upside, research analysts plainly believe LegalZoom.com is more favorable than TeleTech.

Institutional and Insider Ownership

82.0% of LegalZoom.com shares are owned by institutional investors. Comparatively, 38.0% of TeleTech shares are owned by institutional investors. 7.4% of LegalZoom.com shares are owned by company insiders. Comparatively, 59.4% of TeleTech shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

LegalZoom.com has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, TeleTech has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Profitability

This table compares LegalZoom.com and TeleTech’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%
TeleTech	-10.23%	16.25%	1.60%

Valuation & Earnings

This table compares LegalZoom.com and TeleTech”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LegalZoom.com	$756.04 million	1.14	$15.43 million	$0.12	43.67
TeleTech	$2.14 billion	0.03	-$192.47 million	($4.30)	-0.32

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

Summary

LegalZoom.com beats TeleTech on 10 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 Mountain View, California.

About TeleTech

TTEC Holdings, Inc. operates as a customer experience (CX) company that designs, builds, and operates technology-enabled customer experiences across digital and live interaction channels. It operates through two segments, TTEC Digital and TTEC Engage. The TTEC Digital segment provides CX technologies for contact center as a service, customer relationship management, and artificial intelligence (AI) and analytics; creates and implements strategic CX transformation roadmaps; sells, operates, and provides managed services for cloud platforms and premise based CX technologies; creates proprietary IP to support industry specific and custom client needs; and offers CX consulting services. The TTEC Engage segment provides digitally enabled CX operational and managed services; delivers data-driven omnichannel customer care, customer acquisition, growth and retention services, tech support, trust and safety, and back-office solutions; and offers solutions for AI operations, including data annotation and labeling. It serves clients in the healthcare, automotive, government, financial services, communication, technology, travel, logistics, media and entertainment, e-tail/retail, and transportation industries with operations in the United States, Australia, Belgium, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Germany, Greece, India, Ireland, Mexico, the Netherlands, New Zealand, the Philippines, Poland, South Africa, Thailand, and the United Kingdom. The company was formerly known as TeleTech Holdings, Inc. and changed its name to TTEC Holdings, Inc. in January 2018. TTEC Holdings, Inc. was founded in 1982 and is headquartered in Greenwood Village, Colorado.