In today’s fast-evolving tech landscape, DocuSign, Inc. and SoundHound AI, Inc. stand out as innovators in the software application industry. DocuSign leads in digital transaction management and AI-enhanced contract solutions, while SoundHound AI pioneers voice recognition and conversational AI platforms. Their focus on integrating artificial intelligence shapes a competitive overlap worth examining. Join me as we analyze these companies to find which offers the most compelling investment opportunity for your portfolio.
Table of contents
Companies Overview
I will begin the comparison between DocuSign and SoundHound AI by providing an overview of these two companies and their main differences.
DocuSign Overview
DocuSign, Inc. specializes in electronic signature software, enabling businesses to digitally prepare, sign, and manage agreements globally. Its offerings extend to contract lifecycle management powered by AI, industry-specific cloud solutions, and remote online notarization. Founded in 2003 and headquartered in San Francisco, DocuSign serves enterprise and small businesses through direct and partner-assisted sales, positioning itself as a leader in digital agreement technology.
SoundHound AI Overview
SoundHound AI, Inc. develops an independent voice AI platform aimed at enhancing conversational experiences across industries. Its flagship product, Houndify, provides tools such as speech recognition, natural language understanding, and text-to-speech to help brands build custom voice assistants. Based in Santa Clara and founded recently, SoundHound focuses on embedding voice solutions into various applications to improve customer interaction.
Key similarities and differences
Both DocuSign and SoundHound operate within the software application industry and leverage AI technologies to innovate their services. However, DocuSign concentrates on digital agreements and contract management solutions, targeting document workflows, while SoundHound focuses on voice AI platforms that enhance conversational interfaces. Their business models differ in product focus, market reach, and scale, with DocuSign having a larger workforce and market capitalization compared to SoundHound.
Income Statement Comparison
The table below compares the most recent fiscal year income statement metrics for DocuSign, Inc. and SoundHound AI, Inc., providing a snapshot of their financial performance.
| Metric | DocuSign, Inc. (DOCU) | SoundHound AI, Inc. (SOUN) |
|---|---|---|
| Market Cap | 11.4B | 4.7B |
| Revenue | 3.0B | 85M |
| EBITDA | 357M | -329M |
| EBIT | 249M | -348M |
| Net Income | 1.07B | -351M |
| EPS | 5.23 | -1.04 |
| Fiscal Year | 2025 | 2024 |
Income Statement Interpretations
DocuSign, Inc.
DocuSign exhibited consistent revenue growth from 2021 to 2025, doubling its revenue to nearly 3B USD. Net income shifted from losses in early years to a strong profit of about 1.07B USD in 2025. Gross margins remained robust around 79%, while net margins improved significantly, reaching 36% in 2025. The recent year saw stable revenue growth and marked margin expansions, signaling operational efficiency gains.
SoundHound AI, Inc.
SoundHound’s revenue grew rapidly, increasing more than fivefold from 2020 to 2024, reaching 85M USD. However, net income remained negative across the period with a 351M USD loss in 2024. Gross margin was moderate at 49%, but EBIT and net margins were deeply negative, reflecting ongoing high expenses. Despite strong top-line growth, profitability deteriorated in the latest year, with operating losses widening considerably.
Which one has the stronger fundamentals?
DocuSign demonstrates stronger fundamentals, supported by favorable gross and net margins, positive net income growth, and improved profitability in the latest year. Conversely, SoundHound shows impressive revenue growth but sustained heavy losses and unfavorable profitability metrics. The contrasting margin stability and net income trends highlight DocuSign’s comparatively solid income statement foundation.
Financial Ratios Comparison
The table below compares key financial ratios for DocuSign, Inc. and SoundHound AI, Inc. based on their most recent fiscal year data, offering insight into their profitability, liquidity, leverage, and market valuation.
| Ratios | DocuSign, Inc. (2025) | SoundHound AI, Inc. (2024) |
|---|---|---|
| ROE | 53.3% | -191.9% |
| ROIC | 9.1% | -68.1% |
| P/E | 18.5 | -19.1 |
| P/B | 9.87 | 36.76 |
| Current Ratio | 0.81 | 3.77 |
| Quick Ratio | 0.81 | 3.77 |
| D/E | 0.062 | 0.024 |
| Debt-to-Assets | 3.1% | 0.79% |
| Interest Coverage | 129.0 | -28.1 |
| Asset Turnover | 0.74 | 0.15 |
| Fixed Asset Turnover | 7.28 | 14.28 |
| Payout ratio | 0% | 0% |
| Dividend yield | 0% | 0% |
Interpretation of the Ratios
DocuSign, Inc.
DocuSign shows a slightly favorable ratio profile with strong net margin at 35.87% and a robust return on equity of 53.32%. However, its price-to-book ratio of 9.87 and current ratio below 1 indicate potential valuation concerns and liquidity constraints. The company does not pay dividends, likely reinvesting earnings to support growth and innovation.
SoundHound AI, Inc.
SoundHound AI exhibits mostly unfavorable ratios, including a deeply negative net margin at -414.06% and return on equity of -191.99%, reflecting significant losses. Its high current ratio of 3.77 suggests strong liquidity but is marked unfavorable due to inefficiency or asset mismanagement. Like DocuSign, it pays no dividends, focusing instead on R&D and platform development.
Which one has the best ratios?
DocuSign’s ratios are generally stronger, with several favorable indicators such as profitability and leverage metrics, despite some liquidity and valuation weaknesses. SoundHound AI’s ratios are predominantly unfavorable, reflecting operational challenges and losses. Overall, DocuSign presents a more balanced and stable financial ratio profile compared to SoundHound AI.
Strategic Positioning
This section compares the strategic positioning of DocuSign and SoundHound, including Market position, Key segments, and disruption:
DocuSign
- Leading e-signature provider with significant market cap and moderate competitive pressure.
- Focused on electronic signature software and AI-driven contract lifecycle management mainly for enterprises and SMBs.
- Faces technological disruption primarily through AI integration in contract management and digital workflows.
SoundHound
- Smaller market cap with a higher beta, facing intense competitive pressure in voice AI.
- Develops voice AI platform focusing on conversational voice assistants across industries.
- Exposure to disruption in voice recognition and natural language processing technologies.
DocuSign vs SoundHound Positioning
DocuSign has a concentrated focus on digital agreements and contract management, leveraging AI for workflow automation, while SoundHound pursues a diversified approach in voice AI platforms. DocuSign benefits from a larger scale; SoundHound is exposed to fast-evolving voice technologies.
Which has the best competitive advantage?
DocuSign shows a slightly favorable moat with growing ROIC and improving profitability, suggesting a nascent competitive advantage. SoundHound is slightly unfavorable, shedding value despite increasing profitability, indicating weaker competitive positioning currently.
Stock Comparison
The stock price movements of DocuSign, Inc. (DOCU) and SoundHound AI, Inc. (SOUN) over the past 12 months reveal significant bullish trends with recent downturns, highlighting notable volatility and shifts in buyer-seller dynamics.
Trend Analysis
DocuSign’s stock shows a 9.63% price increase over the past year, indicating a bullish trend with deceleration. The price ranged between 50.84 and 106.99, with recent weeks showing a -22.46% decline and seller dominance.
SoundHound AI’s price surged 183.16% over the last 12 months, also bullish with deceleration. Its price fluctuated from 3.55 to 23.95, but faced a sharper recent drop of -37.0%, accompanied by seller dominance in volume.
Comparing the two, SoundHound AI delivered the highest overall market performance with a much larger annual gain despite recent declines, while DocuSign showed moderate bullish growth and volatility.
Target Prices
The current analyst consensus presents a positive outlook for both DocuSign, Inc. and SoundHound AI, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| DocuSign, Inc. | 88 | 70 | 76.86 |
| SoundHound AI, Inc. | 15 | 11 | 13.33 |
Analysts expect DocuSign’s share price to appreciate substantially from the current $56.71, while SoundHound AI shows a moderate upside potential from $11.10, reflecting cautious optimism in both stocks.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for DocuSign, Inc. and SoundHound AI, Inc.:
Rating Comparison
DocuSign, Inc. Rating
- Rating: B+, classified as Very Favorable.
- Discounted Cash Flow Score: 5, indicating Very Favorable valuation.
- ROE Score: 4, a Favorable measure of profit efficiency.
- ROA Score: 4, Favorable asset utilization.
- Debt To Equity Score: 3, Moderate financial risk.
SoundHound AI, Inc. Rating
- Rating: C-, classified as Very Favorable.
- Discounted Cash Flow Score: 1, considered Very Unfavorable.
- ROE Score: 1, rated Very Unfavorable for profit efficiency.
- ROA Score: 1, Very Unfavorable asset utilization.
- Debt To Equity Score: 4, Favorable financial risk.
Which one is the best rated?
Based on the provided data, DocuSign holds a superior overall rating (B+) with stronger scores in discounted cash flow, ROE, and ROA. SoundHound AI, despite a favorable debt-to-equity score, has generally unfavorable ratings and a lower overall score.
Scores Comparison
Here is a comparison of the financial scores for DocuSign, Inc. and SoundHound AI, Inc.:
DocuSign Scores
- Altman Z-Score: 4.43, indicating a safe zone with low bankruptcy risk.
- Piotroski Score: 5, reflecting average financial strength.
SoundHound AI Scores
- Altman Z-Score: 6.62, indicating a safe zone with very low bankruptcy risk.
- Piotroski Score: 3, reflecting very weak financial strength.
Which company has the best scores?
SoundHound AI has a higher Altman Z-Score than DocuSign, signaling stronger bankruptcy safety. However, DocuSign’s Piotroski Score is notably higher, indicating better overall financial strength.
Grades Comparison
Here is a comparison of the recent grades assigned to DocuSign, Inc. and SoundHound AI, Inc.:
DocuSign, Inc. Grades
The following table summarizes recent grades from reputable grading companies for DocuSign, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Sector Perform | 2026-01-05 |
| Evercore ISI Group | Maintain | In Line | 2025-12-05 |
| UBS | Maintain | Neutral | 2025-12-05 |
| Wells Fargo | Maintain | Equal Weight | 2025-12-05 |
| Piper Sandler | Maintain | Neutral | 2025-12-05 |
| JP Morgan | Maintain | Neutral | 2025-12-05 |
| B of A Securities | Maintain | Neutral | 2025-12-05 |
| Needham | Maintain | Hold | 2025-12-05 |
| Baird | Maintain | Neutral | 2025-12-05 |
Overall, DocuSign’s grades consistently indicate a neutral to hold stance, reflecting a cautious outlook.
SoundHound AI, Inc. Grades
The following table summarizes recent grades from reputable grading companies for SoundHound AI, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Piper Sandler | Maintain | Neutral | 2026-01-05 |
| Cantor Fitzgerald | Upgrade | Overweight | 2025-12-12 |
| DA Davidson | Maintain | Buy | 2025-11-18 |
| HC Wainwright & Co. | Maintain | Buy | 2025-10-16 |
| Wedbush | Maintain | Outperform | 2025-09-11 |
| Ladenburg Thalmann | Upgrade | Buy | 2025-08-11 |
SoundHound AI’s grades show a positive trend with several buy and outperform ratings, indicating analyst confidence.
Which company has the best grades?
SoundHound AI, Inc. has received stronger grades overall, with multiple buy and outperform ratings, contrasting with DocuSign’s neutral to hold consensus. This difference could influence investor sentiment regarding growth prospects and risk tolerance.
Strengths and Weaknesses
Below is a comparison table highlighting the key strengths and weaknesses of DocuSign, Inc. (DOCU) and SoundHound AI, Inc. (SOUN) based on their recent financial and operational data.
| Criterion | DocuSign, Inc. (DOCU) | SoundHound AI, Inc. (SOUN) |
|---|---|---|
| Diversification | Moderate; mainly subscription-based with some professional services | Limited; revenue mainly from hosted services and licensing |
| Profitability | Strong net margin (35.9%), high ROE (53.3%), slightly favorable overall ratios | Negative net margin (-414%), negative ROE (-192%), unfavorable overall ratios |
| Innovation | Growing ROIC trend, slightly favorable moat status | Growing ROIC trend but overall value destroying, slightly unfavorable moat status |
| Global presence | Established with strong recurring revenue base | Smaller scale with less diversification in revenue streams |
| Market Share | Leading position in e-signature and digital agreement solutions | Niche player in voice AI technology with limited scale |
Key takeaways: DocuSign demonstrates a stronger and more stable financial profile with growing profitability and a solid market presence, despite some weaknesses in liquidity ratios. SoundHound AI shows innovation potential but struggles with profitability and efficient capital use, suggesting higher investment risk.
Risk Analysis
The following table summarizes the key risk factors for DocuSign, Inc. (DOCU) and SoundHound AI, Inc. (SOUN) based on their most recent financial and operational data:
| Metric | DocuSign, Inc. (DOCU) | SoundHound AI, Inc. (SOUN) |
|---|---|---|
| Market Risk | Moderate (Beta 0.99) | High (Beta 2.88) |
| Debt level | Low (Debt-to-Equity 0.06) | Very Low (Debt-to-Equity 0.02) |
| Regulatory Risk | Moderate (Tech industry) | Moderate (Tech industry) |
| Operational Risk | Moderate (Scale & integration) | High (Early-stage growth issues) |
| Environmental Risk | Low | Low |
| Geopolitical Risk | Moderate (US-focused) | Moderate (US-focused) |
DocuSign shows moderate market and operational risks but benefits from low debt and solid financial health, whereas SoundHound’s high market volatility and poor profitability metrics present heightened operational and financial risks despite minimal leverage. The most impactful risk is SoundHound’s financial instability, reflected in its unfavorable net margin and return ratios, increasing its vulnerability.
Which Stock to Choose?
DocuSign, Inc. (DOCU) exhibits a favorable income evolution with strong net margin growth and profitability, supported by a high return on equity (53.3%) and low debt levels (debt-to-equity 0.06). Its rating is very favorable (B+) with a slightly favorable economic moat despite some liquidity concerns.
SoundHound AI, Inc. (SOUN) shows high revenue growth but unfavorable profitability metrics, including a deeply negative net margin (-414%) and return on equity (-192%). Despite low debt, its financial ratios and global income statement evaluation are unfavorable, with a very unfavorable overall rating (C-), and a slightly unfavorable moat.
Investors focused on profitability and financial stability may find DocuSign’s profile more consistent with quality investing, while those seeking rapid top-line growth and able to tolerate higher risk might see SoundHound’s potential differently. The choice could depend on the investor’s risk tolerance and growth versus stability preference.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of DocuSign, Inc. and SoundHound AI, Inc. to enhance your investment decisions:
