SoundHound AI: A Promising AI Stock Set to Soar
Feb 5, 2025
Financial Analysis: SoundHound AI (NASDAQ:SOUN) & Progress Software (NASDAQ:PRGS)
On February 5th, 2025, we examine two mid-cap companies in the technology sector: SoundHound AI (NASDAQ:SOUN) and Progress Software (NASDAQ:PRGS). This analysis aims to determine which company presents a better investment opportunity. We will explore several factors including institutional ownership, earnings, risk, profitability, valuation, analyst recommendations, and dividends.
Earnings & Valuation
The following table provides a comparative overview of key financial metrics for SoundHound AI and Progress Software.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| SoundHound AI | $67.30 million | 86.32 | -$88.94 million | ($0.36) | -43.64 |
| Progress Software | $753.41 million | 3.30 | $68.44 million | $1.56 | 36.75 |
Progress Software demonstrates significantly higher revenue and earnings compared to SoundHound AI. Moreover, SoundHound AI's lower price-to-earnings ratio suggests it is more affordable at this time.
Insider and Institutional Ownership
Institutional investors hold 19.3% of SoundHound AI shares, while insider ownership stands at 12.3%. In contrast, only 3.3% of Progress Software shares are owned by insiders. High institutional ownership generally implies strong investor confidence in the company's growth potential.
Profitability
The following table compares the profitability metrics of both companies.
| Net Margins | Return on Equity | Return on Assets | |
| SoundHound AI | -163.58% | -55.58% | -31.70% |
| Progress Software | 9.08% | 41.56% | 9.86% |
Risk and Volatility
SoundHound AI's stock displays a beta of 2.56, revealing that its price is 156% more volatile than the S&P 500 index. Meanwhile, Progress Software has a beta of 0.93, indicating it is 7% less volatile than the market.
Analyst Recommendations
Recent analyst ratings for both companies provide a further insight into their investment potential. The following table summarizes the ratings.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SoundHound AI | 0 | 3 | 4 | 0 | 2.57 |
| Progress Software | 0 | 2 | 5 | 0 | 2.71 |
Analysts have set a consensus price target of $12.36 for SoundHound AI, which reflects a potential downside of 21.34%. For Progress Software, the average price target is $72.43, suggesting a potential upside of 26.34%. Overall, analysts exhibit a more favorable outlook for Progress Software compared to SoundHound AI.
Summary
In summary, Progress Software exceeds SoundHound AI in 10 out of the 14 comparison factors examined.
About SoundHound AI
SoundHound AI, Inc. specializes in developing voice artificial intelligence solutions for various industries including automotive and customer service. Their product suite includes tools for creating voice assistants and integrates real-time data to enhance conversational experiences.
About Progress Software
Progress Software Corporation provides a range of business applications and services, including tools for application development and data management across various platforms. Founded in 1981, the company is dedicated to enhancing enterprise efficiency and performance.
investment, technology, analysis, business