SoundHound AI (NASDAQ:SOUN) & Fair Isaac (NYSE:FICO) Financial Analysis

SoundHound AI (NASDAQ:SOUN) and Fair Isaac (NYSE:FICO) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Analyst Recommendations

This is a breakdown of current ratings for SoundHound AI and Fair Isaac, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SoundHound AI	1	3	5	1	2.60
Fair Isaac	0	5	10	0	2.67

SoundHound AI currently has a consensus target price of $14.93, suggesting a potential upside of 56.16%. Fair Isaac has a consensus target price of $1,690.79, suggesting a potential upside of 63.32%. Given Fair Isaac’s stronger consensus rating and higher possible upside, analysts plainly believe Fair Isaac is more favorable than SoundHound AI.

Valuation & Earnings

This table compares SoundHound AI and Fair Isaac”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SoundHound AI	$168.92 million	23.93	-$14.01 million	($0.05)	-191.20
Fair Isaac	$1.99 billion	12.06	$651.95 million	$27.02	38.31

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

Insider and Institutional Ownership

19.3% of SoundHound AI shares are owned by institutional investors. Comparatively, 85.8% of Fair Isaac shares are owned by institutional investors. 8.8% of SoundHound AI shares are owned by company insiders. Comparatively, 3.0% of Fair Isaac shares are owned by company 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 SoundHound AI and Fair Isaac’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SoundHound AI	-8.71%	-3.63%	-2.30%
Fair Isaac	33.67%	-41.04%	37.92%

Volatility and Risk

SoundHound AI has a beta of 2.71, meaning that its share price is 171% more volatile than the S&P 500. Comparatively, Fair Isaac has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Summary

Fair Isaac beats SoundHound AI on 10 of the 15 factors compared between the two stocks.

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.

About Fair Isaac

Fair Isaac Corporation develops analytic, software, and digital decisioning technologies and services that enable businesses to automate, enhance, and connect decisions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates in two segments, Scores and Software. The Software segment provides pre-configured analytic and decision management solution designed for various business needs or processes, such as account origination, customer management, customer engagement, fraud detection, financial crimes compliance, and marketing, as well as associated professional services. This segment also offers FICO Platform, a modular software offering designed to support advanced analytic and decision use cases, as well as stand-alone analytic and decisioning software that can be configured by customers to address a wide range of business use cases. The Scores segment provides business-to-business scoring solutions and services for consumers that give clients access to predictive credit and other scores that can be integrated into their transaction streams and decision-making processes, as well as business-to-consumer scoring solutions comprising myFICO.com subscription offerings. It offers FICO Customer Analytics, FICO Responsible AI, FICO Advisors, FICO Business Outcome Simulator, FICO Forecaster, FICO TRIAD Customer Manager, FICO Blaze Advisor, FICO Xpress Optimization, FICO Falcon Fraud Manager, FICO Analytics Workbench, FICO Data Orchestrator, FICO DMP Streaming, FICO Decision Optimizer, and FICO Strategy Director, as well as software implementation and configuration services. The company markets its products and services primarily through its direct sales organization and indirect channels, as well as online. The company was formerly known as Fair Isaac & Company, Inc. and changed its name to Fair Isaac Corporation in July 1992. Fair Isaac Corporation was founded in 1956 and is headquartered in Bozeman, Montana.