Financial Analysis: TaskUs (NASDAQ:TASK) versus LegalZoom.com (NASDAQ:LZ)

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

Institutional and Insider Ownership

82.0% of LegalZoom.com shares are owned by institutional investors. Comparatively, 44.6% of TaskUs shares are owned by institutional investors. 10.5% of LegalZoom.com shares are owned by company insiders. Comparatively, 29.3% of TaskUs shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

LegalZoom.com has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, TaskUs has a beta of 2.21, suggesting that its stock price is 121% more volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LegalZoom.com	$678.84 million	2.25	$13.95 million	$0.13	68.08
TaskUs	$955.01 million	1.46	$45.69 million	$0.59	26.51

TaskUs has higher revenue and earnings than LegalZoom.com. TaskUs 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 TaskUs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LegalZoom.com	3.61%	32.88%	9.31%
TaskUs	5.58%	17.73%	9.17%

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LegalZoom.com	2	6	2	0	2.00
TaskUs	1	3	4	0	2.38

LegalZoom.com presently has a consensus price target of $9.06, suggesting a potential upside of 2.40%. TaskUs has a consensus price target of $17.00, suggesting a potential upside of 8.70%. Given TaskUs’ stronger consensus rating and higher probable upside, analysts plainly believe TaskUs is more favorable than LegalZoom.com.

Summary

TaskUs beats LegalZoom.com on 9 of the 14 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 TaskUs

TaskUs, Inc. provides digital outsourcing services for companies in Philippines, the United States, India, and internationally. It offers digital customer experience that consists of omni-channel customer care services primarily delivered through non-voice digital channels; and other solutions, including experience and customer care services for new product or market launches, and customer acquisition solutions. The company also provides trust and safety solutions, such as review and disposition of user and advertiser generated visual, text, and audio content, which include removal or labeling of policy violating, and offensive or misleading content, as well as risk management, compliance, identity management, and fraud services; and artificial intelligence (AI) solutions that consist of data labeling, annotation, context relevance, and transcription services for training and tuning machine learning algorithms that enables to develop AI systems. It serves clients in various industry segments comprising e-commerce, FinTech, food delivery and ride sharing, gaming, technology, HealthTech, social media, and streaming media. The company was formerly known as TU TopCo, Inc. and changed its name to TaskUs, Inc. in December 2020. TaskUs, Inc. was founded in 2008 and is headquartered in New Braunfels, Texas.