Head to Head Survey: SoundHound AI (NASDAQ:SOUN) and Sprout Social (NASDAQ:SPT)

Sprout Social (NASDAQ:SPT) and SoundHound AI (NASDAQ:SOUN) are both mid-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, risk, valuation and analyst recommendations.

Earnings and Valuation

This table compares Sprout Social and SoundHound AI”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sprout Social	$392.40 million	4.96	-$66.43 million	($1.20)	-28.28
SoundHound AI	$45.87 million	136.31	-$88.94 million	($0.36)	-46.97

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Sprout Social and SoundHound AI, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sprout Social	1	7	7	0	2.40
SoundHound AI	0	3	4	0	2.57

Sprout Social presently has a consensus target price of $45.46, indicating a potential upside of 33.99%. SoundHound AI has a consensus target price of $7.64, indicating a potential downside of 54.80%. Given Sprout Social’s higher probable upside, research analysts clearly believe Sprout Social is more favorable than SoundHound AI.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sprout Social	-17.24%	-40.94%	-15.70%
SoundHound AI	-163.58%	-55.58%	-31.70%

Insider and Institutional Ownership

19.3% of SoundHound AI shares are held by institutional investors. 11.0% of Sprout Social 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 large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Sprout Social has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, SoundHound AI has a beta of 3.03, indicating that its stock price is 203% more volatile than the S&P 500.

Summary

Sprout Social beats SoundHound AI on 8 of the 14 factors compared between the two stocks.

About Sprout Social

Sprout Social, Inc. designs, develops, and operates a web-based social media management platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides cloud software for social messaging, data and workflows in a unified system of record, intelligence, and action. It offers integrated tools, such as social engagement/response; publishing; reporting and analytics; social listening and business intelligence; reputation management; social commerce; employee advocacy; and automation and workflows. In addition, the company provides smart inbox, social customer relationship management, social monitoring and alerts, customer service tools, and automation; and centralized content planning, creation, and publishing, automated scheduling, content performance reporting, suggested content, message approval workflows, publishing permissions and governance, and content and asset libraries. Further, it offers social media; content performance, customer service and team, custom report builder, and reporting API; and market research, brand health, competitive insights, consumer trends, and product feedback; and social commerce, reputation management, employee advocacy, mobile applications, and chat bot creation and management. Additionally, the company offers professional services consisting of consulting and training services. It serves social and community management; public relations; marketing; influencer marketing; customer service and care; commerce, sales and customer acquisition; recruiting and hiring, product development, and business strategy; and small-and-medium-sized businesses, mid-market companies, enterprises, marketing agencies, government, non-profit, and educational institutions. Sprout Social, Inc. was incorporated in 2010 and is headquartered in Chicago, Illinois.

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.