Critical Analysis: Roadzen (NASDAQ:RDZN) and Huize (NASDAQ:HUIZ)

Huize (NASDAQ:HUIZ) and Roadzen (NASDAQ:RDZN) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Volatility & Risk

Huize has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, Roadzen has a beta of 0.21, indicating that its share price is 79% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Huize and Roadzen, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Huize	0	0	0	0	0.00
Roadzen	0	0	2	0	3.00

Roadzen has a consensus price target of $5.00, indicating a potential upside of 255.87%. Given Roadzen’s stronger consensus rating and higher possible upside, analysts clearly believe Roadzen is more favorable than Huize.

Earnings and Valuation

This table compares Huize and Roadzen”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Huize	$168.39 million	0.20	$9.89 million	$0.09	37.56
Roadzen	$46.72 million	2.23	-$99.67 million	($1.92)	-0.73

Huize has higher revenue and earnings than Roadzen. Roadzen is trading at a lower price-to-earnings ratio than Huize, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Huize and Roadzen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Huize	1.75%	5.07%	2.16%
Roadzen	-290.14%	N/A	-262.79%

Insider and Institutional Ownership

24.7% of Roadzen shares are held by institutional investors. 30.4% of Huize shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Huize beats Roadzen on 9 of the 14 factors compared between the two stocks.

About Huize

Huize Holding Limited, together with its subsidiaries, offers online insurance product and service platform through various internet channels in the People's Republic of China. The company provides life and health insurance products, such as critical illness, illness and disease, annuity, and term and whole life insurance products; and property and casualty insurance products, including travel, individual casualty, and corporate liability insurance products. It also offers offline insurance intermediary and brokerage services. The company also provides digital and technology development services; investment, technology development, internet information, management, and financial consulting services; business management and catering services; and insurance agency services. Huize Holding Limited was founded in 2006 and is headquartered in Shenzhen, China.

About Roadzen

Roadzen, Inc., an insurtech company, provides various insurance products in the United States and internationally. It offers insurance as a service platform, including Via, which enables fleets, carmakers, and insurers to inspect a vehicle using computer vision; Global Distribution Network that enables the configuration, customer quote, payment, and administration of any insurance policy with any insurance carrier as the underwriter; xClaim, which enables digital, touchless, and real-time resolution of claims; StrandD, a digital, real-time dispatch, and tracking for roadside assistance and first notice of loss during accident claims; Good Driving that enables insurers and fleets to recognize drivers, train drivers, and build usage based insurance programs; and Drivebuddy AI, which provides driver-assistance capabilities. The company also provides insurance distribution platform that enables product creation and underwriting, re-insurer backing, and API exchange; and distribution, pre-inspection assistance, telematics, and roadside assistance. In addition, it offers insurance broker services. Roadzen, Inc. was founded in 2015 and is based in Burlingame, California.