Progress Software (NASDAQ:PRGS) and SoundHound AI (NASDAQ:SOUN) Financial Review

Progress Software (NASDAQ:PRGS) and SoundHound AI (NASDAQ:SOUN) are both mid-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Insider & Institutional Ownership

19.3% of SoundHound AI shares are held by institutional investors. 3.4% of Progress Software shares are held by company insiders. Comparatively, 12.3% of SoundHound AI shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Progress Software and SoundHound AI”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Progress Software	$753.41 million	3.30	$68.44 million	$1.56	36.75
SoundHound AI	$45.87 million	114.06	-$88.94 million	($0.36)	-39.31

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

Profitability

This table compares Progress Software and SoundHound AI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Progress Software	9.08%	41.56%	9.86%
SoundHound AI	-163.58%	-55.58%	-31.70%

Risk & Volatility

Progress Software has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, SoundHound AI has a beta of 2.63, suggesting that its stock price is 163% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Progress Software and SoundHound AI, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Progress Software	0	2	5	0	2.71
SoundHound AI	0	3	4	0	2.57

Progress Software presently has a consensus target price of $72.43, indicating a potential upside of 26.34%. SoundHound AI has a consensus target price of $12.36, indicating a potential downside of 12.67%. Given Progress Software’s stronger consensus rating and higher probable upside, research analysts plainly believe Progress Software is more favorable than SoundHound AI.

Summary

Progress Software beats SoundHound AI on 10 of the 14 factors compared between the two stocks.

About Progress Software

Progress Software Corporation develops, deploys, and manages business applications in the United States and internationally. The company offers OpenEdge, an application development platform for running business-critical applications; Chef, a DevOps/DevSecOps automation software; Developer Tools that consists of software development tooling collection, including .NET and JavaScript UI components for web, desktop and mobile applications, reporting and report management tools, and automated testing and mocking tools; Kemp LoadMaster, an application delivery and security product offering cloud-native, and virtual and hardware load balancers; and Sitefinity, a digital experience platform foundation delivering intelligent and ROI-driving tools for marketers. It also provides MOVEit, a managed file transfer software for managing and controlling the movement of sensitive files and securing them both at-rest and in-transit; DataDirect, a secure data connectivity tools for Relational, NoSQL, Big Data and SaaS data sources; WhatsUp Gold, a network infrastructure monitoring software providing complete visibility of all network devices, servers, virtual machines, and cloud and wireless environments to find and fix network problems; Flowmon, a network security and visibility product with automated response across hybrid cloud ecosystems; Corticon, a decision automation platform to transform user experiences by streamlining and automating complex business rules; MarkLogic, a data agility platform to connect data and metadata; and Semaphore, a Semantic AI platform. The company offers project management, implementation, custom software development, programming, and other services, as well as web-enable applications; and training services. It sells its products to end users, independent software vendors, original equipment manufacturers, system integrators, value added resellers, and distributors. The company was founded in 1981 and is headquartered in Burlington, Massachusetts.

About SoundHound AI

SoundHound AI, Inc. develops independent voice artificial intelligence (AI) solutions that enables businesses across automotive, TV, and IoT, and to customer service industries to deliver high-quality conversational experiences to their customers. Its products include Houndify platform that offers a suite of Houndify tools to help brands build conversational voice assistants, such as Application Programming Interfaces (API) for text and voice queries, support for custom commands, extensive library of content domains, inclusive software development kit platforms, collaboration capabilities, diagnostic tools, and built-in analytics; SoundHound Chat AI that integrates with knowledge domains, pulling real-time data like weather, sports, stocks, flight status, and restaurants; and SoundHound Smart Answering is built to offer customer establishments custom AI-powered voice assistant. The company's products also include CaiNET software that uses machine learning to enhance how domains work together to handle queries; CaiLAN software that arbitrates responses so users get answers from the right domain; Dynamic Interaction a real-time, multimodal customer service interface; Smart Ordering which offers an easy-to-understand voice assistant for restaurants; Employee Assist; automatic speech recognition; natural language understanding; wake words; custom domains; text-to-speech; and embedded voice solutions. The company was founded in 2005 and is headquartered in Santa Clara, California.