Palladyne AI (NASDAQ:PDYN) and SoundHound AI (NASDAQ:SOUN) Critical Analysis

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

Analyst Recommendations

This is a summary of current ratings for SoundHound AI and Palladyne AI, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SoundHound AI	0	3	4	0	2.57
Palladyne AI	0	0	1	0	3.00

SoundHound AI currently has a consensus target price of $12.36, indicating a potential downside of 20.79%. Palladyne AI has a consensus target price of $15.00, indicating a potential upside of 51.06%. Given Palladyne AI’s stronger consensus rating and higher possible upside, analysts plainly believe Palladyne AI is more favorable than SoundHound AI.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SoundHound AI	-163.58%	-55.58%	-31.70%
Palladyne AI	-722.22%	-56.81%	-37.45%

Volatility and Risk

SoundHound AI has a beta of 2.56, meaning that its stock price is 156% more volatile than the S&P 500. Comparatively, Palladyne AI has a beta of 3.83, meaning that its stock price is 283% more volatile than the S&P 500.

Earnings & Valuation

This table compares SoundHound AI and Palladyne AI”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SoundHound AI	$45.87 million	133.76	-$88.94 million	($0.36)	-43.33
Palladyne AI	$6.15 million	48.62	-$115.59 million	($2.16)	-4.60

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

Insider & Institutional Ownership

19.3% of SoundHound AI shares are owned by institutional investors. Comparatively, 26.0% of Palladyne AI shares are owned by institutional investors. 12.3% of SoundHound AI shares are owned by insiders. Comparatively, 12.0% of Palladyne AI shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

SoundHound AI beats Palladyne AI on 9 of the 14 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 Palladyne AI

Palladyne AI Corp., a software company, focuses on delivering software that enhances the utility and functionality of third-party stationary and mobile robotic systems in the United States. Its Artificial Intelligence (AI)/ Machine Learning (ML) software platform enables robots to observe, learn, reason, and act in structured and unstructured environments. The company's software platform enables robotic systems to perceive their environment and quickly adapt to changing circumstances by generalizing from their experience using dynamic real-time operations without extensive programming and with minimal robot training. It serves customers from various industries, such as industrial manufacturing, warehousing and logistics, defense, infrastructure maintenance and repair, energy, aerospace and aviation, and others. The company was formerly known as Sarcos Technology and Robotics Corporation and changed its name to Palladyne AI Corp. in March 2024. Palladyne AI Corp. was founded in 2017 and is headquartered in Salt Lake City, Utah.