LZ Technology (NASDAQ:LZMH) vs. Genpact (NYSE:G) Financial Analysis

Genpact (NYSE:G) and LZ Technology (NASDAQ:LZMH) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Institutional & Insider Ownership

96.0% of Genpact shares are owned by institutional investors. 3.1% of Genpact shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Genpact and LZ Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Genpact	10.88%	22.06%	10.75%
LZ Technology	N/A	N/A	N/A

Earnings and Valuation

This table compares Genpact and LZ Technology”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Genpact	$5.08 billion	1.37	$513.67 million	$3.13	12.88
LZ Technology	N/A	N/A	N/A	N/A	N/A

Genpact has higher revenue and earnings than LZ Technology.

Analyst Ratings

This is a summary of current recommendations and price targets for Genpact and LZ Technology, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Genpact	0	7	1	0	2.13
LZ Technology	1	0	0	0	1.00

Genpact presently has a consensus target price of $47.57, suggesting a potential upside of 17.98%. Given Genpact’s stronger consensus rating and higher probable upside, analysts plainly believe Genpact is more favorable than LZ Technology.

Summary

Genpact beats LZ Technology on 9 of the 9 factors compared between the two stocks.

About Genpact

Genpact Limited provides business process outsourcing and information technology services in India, rest of Asia, North and Latin America, and Europe. It operates through three segments: Financial services; Consumer and Healthcare; and High Tech and Manufacturing. The Financial Services segment offers retail customer onboarding, customer service, collections, card servicing operations, loan and payment operations, commercial loan, equipment and auto loan, mortgage origination, compliance services, reporting and monitoring, and wealth management operations support; financial crime and risk management services; and underwriting support, new business processing, policy administration, claims management, catastrophe modeling and actuarial services, as well as property and casualty claims. The Consumer and Healthcare segment provides demand generation, sensing and planning, supply chain planning and management, pricing and trade promotion management, deduction recovery management, order management, and digital commerce; and end-to-end claim lifecycle management, from claims processing and adjudication to claims recovery and payment integrity, revenue cycle management, health equity analytics, and care services. The High Tech and Manufacturing segment offers industry-specific solutions for trust and safety, advertising sales support, customer and user experience, and customer care support; and direct and indirect procurement, logistics, field, aftermarket support, and engineering services. It also provides digital operation services; data-tech-Al services; finance and accounting services, such as accounts payable, invoice-to-cash, record to report, financial planning and analysis, and enterprise risk and compliance; CFO advisory services; supply chain, and sourcing and procurement services; sales and commercial, and marketing and experience services; and environmental, social and governance services. The company was founded in 1997 and is based in Hamilton, Bermuda.

About LZ Technology

As a holding company with no material operations of its own, LZ Technology conducts its operations through its operating entities formed in the PRC, primarily Lianzhang Portal and its subsidiaries. For the years ended December 31, 2022 and 2023, the Company had a total of 247 and 255 customers, respectively, who entered into contracts with the Company to purchase the Company’s products and services. For the six months ended June 30, 2024 and 2023, the Company had a total of 168 and 102 customers, respectively, who entered into contracts with the Company to purchase the Company’s products and services. The Company, however, has derived a large portion of its revenues from a few customers. For the years ended December 31, 2022 and 2023, the Company’s top three customers collectively accounted for approximately 84.4% and 24.5% of its total revenue, respectively. For the six months ended June 30, 2024, the Company’s top three customers collectively accounted for approximately 33.2% of its total revenue. The Company is an information technology and advertising company. Its operations are organized primarily into three business verticals: (i) Smart Community, (ii) Out-of-Home Advertising, and (iii) Local Life. Smart Community. The Company provides intelligent community building access and safety management systems through access control monitors and vendor-provided SaaS platforms. The Company’s intelligent community access control system makes resident access to properties simpler. As of June 30, 2024, approximately 72,773 of the Company’s access control screens had been installed in over 4,000 residential communities, serving over 2.7 million households. Out-of-Home Advertising. The Company offers clients one-stop multi-channel advertising solutions. Capitalizing on the Company’s network of monitors that span approximately 120 cities in China such as Shanghai, Beijing, Guangzhou, Shenzhen, Nanjing, Xiamen, Hefei, Dalian, Ningbo, Chengdu, Hangzhou, Wuhan, Chongqing, Changsha, the Company’s Out-of-Home Advertising services help merchants display advertisements in a variety of formats across its intelligent access control and safety management system. Advertisements are placed on the monitors and within the SaaS software. Residents are exposed to these advertisements each time they enter and exit community buildings or open the SaaS software. This level of visibility serves as a highly effective means of advertising, assisting merchants in effectively promoting their brands and accelerating their product sales. Moreover, the Company partners with other outdoor advertising providers to maximize coverage by placing the advertisements on the partners’ numerous displays in public transportation, hotels and other settings as well as deploying posters at events. This broad approach provides clients with a truly comprehensive out-of-home advertising solution. Local Life. The Company connects local businesses with consumers via online promotions and transactions. With its strong technological capabilities, the Company helps local restaurants, hotels, tourist companies, retail stores, cinemas and other merchants offer deals and coupons to consumers on social media platforms such as WeChat, Douyin (the Chinese version of TikTok) and RedNote. The Local Life vertical bridges the businesses’ need for product sales and promotions and the consumers’ need for dining, shopping, entertainment, tourist attractions and other local services. In addition, deals from local businesses can also be displayed on the access control screens. In this way, clients of the Company’s Local Life services can also reach the Smart Community residents, leveraging the Company’s access control screens’ extensive coverage and high exposure potential. Since early 2023, we have embarked on executing the strategy of deepening engagement with merchants and manufacturers within our Local Life space through facilitating retail sales of diversified goods and services, including beverages, groceries and travel packages. The Company reports financial results in one segment. Currently, a substantial portion of the Company’s revenues are generated from advertising and promotional activities, namely by the Out-of-Home Advertising and Local Life verticals. Revenues from Smart Community, which mainly consist of product sales of access control devices and service fees, contribute only a small portion to the Company’s total revenues. Thus, the Smart Community revenues are grouped with other miscellaneous revenue sources, such as advertising design and production and social media account operations. Our principal executive offices are located at Unit 311, Floor 3, No. 5999 Wuxing Avenue, Zhili Town, Wuxing District, Huzhou City, Zhejiang province, People’s Republic of China 313000. LZ Technology’s registered office is currently located at the office of Sertus Incorporations (Cayman) Limited, Sertus Chambers, Governors Square, Suite # 5-204, 23 Lime Tree Bay Avenue, P.O. Box 2547, Grand Cayman, KY1-1104, Cayman Islands, which may be changed from time to time at the discretion of directors. LZ Technology’s agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY.