SoundHound AI (NASDAQ:SOUN) & Five9 (NASDAQ:FIVN) Critical Analysis

SoundHound AI (NASDAQ:SOUN) and Five9 (NASDAQ:FIVN) are both technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, dividends, valuation, profitability, risk, earnings and institutional ownership.

Insider & Institutional Ownership

19.3% of SoundHound AI shares are held by institutional investors. Comparatively, 96.6% of Five9 shares are held by institutional investors. 8.8% of SoundHound AI shares are held by insiders. Comparatively, 1.2% of Five9 shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares SoundHound AI and Five9″s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SoundHound AI	$203.20 million	9.68	-$14.01 million	($0.38)	-11.66
Five9	$1.20 billion	2.39	$39.42 million	$0.69	54.51

Five9 has higher revenue and earnings than SoundHound AI. SoundHound AI is trading at a lower price-to-earnings ratio than Five9, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for SoundHound AI and Five9, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SoundHound AI	1	3	3	1	2.50
Five9	0	8	11	0	2.58

SoundHound AI presently has a consensus target price of $11.50, suggesting a potential upside of 159.59%. Five9 has a consensus target price of $35.53, suggesting a potential downside of 5.52%. Given SoundHound AI’s higher possible upside, research analysts clearly believe SoundHound AI is more favorable than Five9.

Volatility & Risk

SoundHound AI has a beta of 2.73, indicating that its share price is 173% more volatile than the S&P 500. Comparatively, Five9 has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500.

Profitability

This table compares SoundHound AI and Five9’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SoundHound AI	-67.45%	-30.22%	-20.28%
Five9	4.94%	12.92%	5.65%

Summary

Five9 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 Five9

Five9, Inc., together with its subsidiaries, provides intelligent cloud software for contact centers in the United States, India, and internationally. It offers a virtual contact center cloud platform that delivers a suite of applications, which enables the breadth of contact center-related customer service, sales, and marketing functions. The company’s platform comprises of including interactive virtual agent, agent assist, workflow automation, workforce engagement management, AI insights, and AI summaries that allows to manage and optimize customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces. It also matches each customer interaction with an agent resource and delivers customer data to the agent in real-time through integrations with adjacent enterprise applications, such as CRM software, to optimize the customer experience and enhance agent productivity. The company serves customers in various industries, such as banking and financial services, business process outsourcers, retail, healthcare, technology, and education. Five9, Inc. was incorporated in 2001 and is headquartered in San Ramon, California.