ServiceNow (NYSE:NOW – Get Free Report) and SoundHound AI (NASDAQ:SOUN – Get Free Report) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, earnings, dividends, valuation, risk and institutional ownership.
Volatility and Risk
ServiceNow has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, SoundHound AI has a beta of 2.58, indicating that its stock price is 158% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current recommendations for ServiceNow and SoundHound AI, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ServiceNow | 1 | 3 | 29 | 1 | 2.88 |
| SoundHound AI | 0 | 4 | 5 | 1 | 2.70 |
Institutional and Insider Ownership
87.2% of ServiceNow shares are held by institutional investors. Comparatively, 19.3% of SoundHound AI shares are held by institutional investors. 0.4% of ServiceNow shares are held by company insiders. Comparatively, 9.2% 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 company is poised for long-term growth.
Valuation and Earnings
This table compares ServiceNow and SoundHound AI”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ServiceNow | $10.98 billion | 17.61 | $1.43 billion | $7.94 | 117.13 |
| SoundHound AI | $84.69 million | 67.97 | -$350.68 million | ($0.63) | -22.41 |
ServiceNow has higher revenue and earnings than SoundHound AI. SoundHound AI is trading at a lower price-to-earnings ratio than ServiceNow, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares ServiceNow and SoundHound AI’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ServiceNow | 13.78% | 18.04% | 8.81% |
| SoundHound AI | -171.81% | -73.13% | -40.68% |
Summary
ServiceNow beats SoundHound AI on 11 of the 14 factors compared between the two stocks.
About ServiceNow
ServiceNow, Inc. provides end to-end intelligent workflow automation platform solutions for digital businesses in the North America, Europe, the Middle East and Africa, Asia Pacific, and internationally. The company operates the Now platform for end-to-end digital transformation, artificial intelligence, machine learning, robotic process automation, process mining, performance analytics, and collaboration and development tools. It also provides asset management, cloud observability, integrated risk management; information technology (IT) service management applications; IT service management product suite for enterprise's employees, customers, and partners; strategic portfolio management product suite; IT operations management product that connects a customer's physical and cloud-based IT infrastructure; IT asset management; and security operations that connects with internal and third party. In addition, the company offers integrated risk management product to manage risk and resilience; environmental, social and governance management product; human resources, legal, and workplace service delivery products; customer service management product; and field service management applications. Further, the company provides app engine product; automation engine; platform privacy and security product; and source-to-pay operations. It serves to government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education, and consumer products through service providers and resale partners. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. ServiceNow, Inc. was founded in 2004 and is headquartered in Santa Clara, California.
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.
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