Contrasting LegalZoom.com (NASDAQ:LZ) and UL Solutions (NYSE:ULS)

UL Solutions (NYSE:ULS) and LegalZoom.com (NASDAQ:LZ) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UL Solutions	$3.05 billion	4.30	$325.00 million	$2.47	26.32
LegalZoom.com	$756.04 million	1.41	$15.43 million	$0.09	69.22

UL Solutions has higher revenue and earnings than LegalZoom.com. UL Solutions 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 breakdown of recent recommendations for UL Solutions and LegalZoom.com, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UL Solutions	0	5	6	0	2.55
LegalZoom.com	3	5	0	0	1.62

UL Solutions currently has a consensus price target of $96.78, suggesting a potential upside of 48.84%. LegalZoom.com has a consensus price target of $7.30, suggesting a potential upside of 17.17%. Given UL Solutions’ stronger consensus rating and higher possible upside, equities analysts clearly believe UL Solutions is more favorable than LegalZoom.com.

Volatility & Risk

UL Solutions has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500. Comparatively, LegalZoom.com has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
UL Solutions	16.02%	28.81%	13.25%
LegalZoom.com	2.13%	15.83%	5.08%

Institutional & Insider Ownership

82.0% of LegalZoom.com shares are owned by institutional investors. 1.2% of UL Solutions shares are owned by insiders. Comparatively, 7.4% of LegalZoom.com shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

UL Solutions beats LegalZoom.com on 10 of the 14 factors compared between the two stocks.

About UL Solutions

UL Solutions Inc. provides safety science services worldwide. It operates through three segments: Industrial, Consumer, and Software and Advisory. The Industrial segment provides testing, inspection, and certification services across various end markets, including energy, industrial automation, engineered materials, and built environment, as well as stakeholders, such as manufacturers, building owners, end users, and regulators. The Consumer segment offers safety certification testing, ongoing certification, global market access, testing for connectivity, performance and quality, and critical systems advisory and training services, as well as product market acceptance and risk mitigation services for customers in the consumer products end markets comprising consumer electronics, medical devices, information technologies, appliances, HVAC, lighting, and retail, as well as consumer applications, such as new mobility, smart products, and 5G. The Software and Advisory segment provide software and technical advisory services that enable customers to manage regulatory requirements, deliver supply chain transparency, and operationalize sustainability for regulated industries, including life sciences, supply chain regulations, transparency needs, and new ESG and sustainability requirements. It offers ULTRUS software brand to help customers improve speed to market, sustainability and safety. UL Solutions Inc. was formerly known as UL Inc. and changed its name to UL Solutions Inc. in June 2022. The company was founded in 1894 and is headquartered in Northbrook, Illinois with additional offices in North America, Asia Pacific, Africa, Europe, Latin America, and Middle East. UL Solutions Inc. operates as a subsidiary of ULSE Inc.

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.