In today’s fast-evolving tech landscape, SoundHound AI, Inc. and PagerDuty, Inc. stand out as innovative players in the software application industry. Both companies leverage artificial intelligence and machine learning to enhance digital experiences, targeting overlapping markets in technology and enterprise solutions. This article will carefully analyze their strategies and performance to help you decide which stock might be the smarter addition to your investment portfolio.
Table of contents
Companies Overview
I will begin the comparison between SoundHound AI and PagerDuty by providing an overview of these two companies and their main differences.
SoundHound AI Overview
SoundHound AI, Inc. develops an independent voice artificial intelligence platform that enables businesses across industries to deliver conversational experiences. Its flagship product, the Houndify platform, offers tools like automatic speech recognition, natural language understanding, and embedded voice solutions. The company is headquartered in Santa Clara, California, operates in the software application industry, and has a market capitalization of approximately 4.7B USD.
PagerDuty Overview
PagerDuty, Inc. operates a digital operations management platform that collects and analyzes data from software-enabled systems using machine learning to anticipate issues. It serves multiple sectors including technology, telecommunications, retail, and financial services. Founded in 2009 and based in San Francisco, California, PagerDuty is positioned in the software application industry with a market capitalization near 1.0B USD.
Key similarities and differences
Both companies operate in the technology sector within the software application industry, focusing on enhancing digital interactions through AI and machine learning. SoundHound AI specializes in voice AI platforms enabling conversational experiences, while PagerDuty emphasizes digital operations management across diverse industries. Their market caps and employee counts differ, reflecting varied scales and operational focuses in their business models.
Income Statement Comparison
This table presents a side-by-side comparison of the latest fiscal year income statement metrics for SoundHound AI, Inc. and PagerDuty, Inc., offering a clear view of their financial performance.
| Metric | SoundHound AI, Inc. (SOUN) | PagerDuty, Inc. (PD) |
|---|---|---|
| Market Cap | 4.7B | 1.0B |
| Revenue | 85M | 467M |
| EBITDA | -329M | -12M |
| EBIT | -348M | -32M |
| Net Income | -351M | -43M |
| EPS | -1.04 | -0.59 |
| Fiscal Year | 2024 | 2025 |
Income Statement Interpretations
SoundHound AI, Inc.
SoundHound AI’s revenue surged significantly by 84.62% in 2024, continuing an overall 550.63% growth since 2020, but net income remained deeply negative, with a net loss of -351M in 2024. Gross margin improved to 48.86%, yet operating and net margins stayed unfavorable, reflecting high expenses. The latest year showed strong revenue growth but worsening profitability and margins.
PagerDuty, Inc.
PagerDuty experienced steady revenue growth of 8.54% in 2025, building on a 118.91% rise since 2021, with gross margin at a favorable 82.96%. Despite persistent net losses, the net margin improved to -9.14%, and EBIT margin narrowed its loss to -6.95%. Operational efficiencies and positive growth in earnings per share marked a healthier trend in the most recent year.
Which one has the stronger fundamentals?
PagerDuty exhibits stronger fundamentals with predominantly favorable income statement metrics, including higher gross margin, improving EBIT and net margins, and consistent growth in revenue and profitability. In contrast, SoundHound AI shows robust revenue expansion but suffers from heavy losses and unfavorable margins, indicating more financial strain despite top-line gains.
Financial Ratios Comparison
The table below presents the most recent key financial ratios for SoundHound AI, Inc. (SOUN) and PagerDuty, Inc. (PD), providing a snapshot of their operational efficiency, liquidity, leverage, and market valuation as of their latest fiscal years.
| Ratios | SoundHound AI, Inc. (2024) | PagerDuty, Inc. (2025) |
|---|---|---|
| ROE | -191.99% | -32.92% |
| ROIC | -68.13% | -9.66% |
| P/E | -19.15 | -39.87 |
| P/B | 36.76 | 13.12 |
| Current Ratio | 3.77 | 1.87 |
| Quick Ratio | 3.77 | 1.87 |
| D/E (Debt to Equity) | 0.02 | 3.57 |
| Debt-to-Assets | 0.79% | 50.00% |
| Interest Coverage | -28.05 | -6.46 |
| Asset Turnover | 0.15 | 0.50 |
| Fixed Asset Turnover | 14.28 | 16.61 |
| Payout ratio | 0% | 0% |
| Dividend yield | 0% | 0% |
Interpretation of the Ratios
SoundHound AI, Inc.
SoundHound AI shows a predominantly unfavorable ratio profile with weak profitability indicators, including a net margin of -414% and return on equity at -192%. The company’s current ratio is high at 3.77 but marked unfavorable, reflecting potential liquidity management concerns. SoundHound AI does not pay dividends, likely due to ongoing negative earnings and a focus on reinvestment and product development.
PagerDuty, Inc.
PagerDuty’s ratios also reveal challenges, with a negative net margin of -9.14% and return on equity at -33%, although liquidity ratios like current and quick ratios are favorable at 1.87. The debt-to-equity of 3.57 and 50% debt-to-assets indicate higher leverage risk. PagerDuty does not pay dividends, possibly prioritizing growth and investment over shareholder payouts at this stage.
Which one has the best ratios?
Both companies have an unfavorable overall ratio assessment, with SoundHound AI showing more pronounced profitability weaknesses and higher valuation multiples. PagerDuty exhibits better liquidity and a lower weighted average cost of capital, but faces leverage concerns. Neither company currently provides dividends, reflecting ongoing investment and growth strategies.
Strategic Positioning
This section compares the strategic positioning of SoundHound AI, Inc. and PagerDuty, Inc., including market position, key segments, and exposure to disruption:
SoundHound AI, Inc.
- Larger market cap of 4.7B with high beta of 2.88, indicating higher market volatility and competitive pressure
- Focused on voice AI platforms with revenue from Hosted Services, Licensing, and Professional Services segments
- Operates in AI voice recognition, facing disruption from evolving speech and language technologies
PagerDuty, Inc.
- Smaller market cap of 1.0B with low beta of 0.63, suggesting lower volatility and competitive pressure
- Digital operations management platform serving diverse industries without disclosed revenue segmentation
- Uses machine learning for digital ops management, exposed to disruption in AI and predictive analytics
SoundHound AI, Inc. vs PagerDuty, Inc. Positioning
SoundHound AI is more concentrated in voice AI technology and related services, relying on specific product segments. PagerDuty adopts a more diversified approach across industries with a broader digital operations platform. This affects their exposure to different market dynamics and technological shifts.
Which has the best competitive advantage?
Both companies have slightly unfavorable MOAT evaluations, shedding value but showing growing profitability trends. Neither demonstrates a strong sustainable competitive advantage based on ROIC versus WACC metrics.
Stock Comparison
The stock price movements of SoundHound AI, Inc. and PagerDuty, Inc. over the past 12 months reveal contrasting trends, with SoundHound AI showing strong gains despite recent pullbacks, while PagerDuty has faced sustained declines.
Trend Analysis
SoundHound AI, Inc. exhibited a bullish overall trend with a 183.16% increase over the past year, although the trend shows deceleration. The stock reached a high of 23.95 and a low of 3.55, with a recent 37% decline indicating short-term weakness.
PagerDuty, Inc. demonstrated a bearish trend with a 51.76% decrease over the past 12 months, also showing deceleration. The stock’s price fluctuated between 11.22 and 24.66, with a recent 30.14% drop confirming continued downward pressure.
Comparing the two, SoundHound AI delivered the highest market performance with a significant positive return, while PagerDuty experienced notable losses, reflecting divergent investor sentiment and price momentum.
Target Prices
The current analyst consensus presents optimistic price targets for these technology software companies.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| SoundHound AI, Inc. | 15 | 11 | 13.33 |
| PagerDuty, Inc. | 19 | 15 | 16.2 |
Analysts expect SoundHound AI’s stock to appreciate moderately above its current price of 11.1 USD, while PagerDuty’s consensus target significantly exceeds its present price of 11.22 USD, indicating stronger bullish sentiment.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for SoundHound AI, Inc. and PagerDuty, Inc.:
Rating Comparison
SoundHound AI, Inc. Rating
- Rating: C-, considered very favorable overall.
- Discounted Cash Flow Score: 1, rated very unfavorable.
- ROE Score: 1, rated very unfavorable.
- ROA Score: 1, rated very unfavorable.
- Debt To Equity Score: 4, rated favorable.
- Overall Score: 1, rated very unfavorable.
PagerDuty, Inc. Rating
- Rating: A-, considered very favorable overall.
- Discounted Cash Flow Score: 5, rated very favorable.
- ROE Score: 5, rated very favorable.
- ROA Score: 5, rated very favorable.
- Debt To Equity Score: 1, rated very unfavorable.
- Overall Score: 4, rated favorable.
Which one is the best rated?
Based on the provided data, PagerDuty, Inc. is clearly better rated with an A- rating and strong scores in discounted cash flow, ROE, ROA, and overall score. SoundHound AI, Inc. holds a C- rating with mostly very unfavorable scores except for a favorable debt-to-equity score.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for SoundHound AI and PagerDuty:
SoundHound AI Scores
- Altman Z-Score: 6.62, indicating a safe zone with low bankruptcy risk.
- Piotroski Score: 3, considered very weak financial strength.
PagerDuty Scores
- Altman Z-Score: 1.26, indicating a distress zone with high bankruptcy risk.
- Piotroski Score: 7, considered strong financial strength.
Which company has the best scores?
SoundHound AI has a much stronger Altman Z-Score, placing it safely above bankruptcy risk. PagerDuty, however, shows stronger financial health in its Piotroski Score. Each company excels in different risk and financial strength metrics.
Grades Comparison
Here is a comparison of the latest reliable grades from recognized grading companies for SoundHound AI, Inc. and PagerDuty, Inc.:
SoundHound AI, Inc. Grades
The following table summarizes recent grades assigned by established grading companies:
| 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 |
| Piper Sandler | Maintain | Neutral | 2025-11-07 |
| HC Wainwright & Co. | Maintain | Buy | 2025-10-16 |
| HC Wainwright & Co. | Maintain | Buy | 2025-09-17 |
| Wedbush | Maintain | Outperform | 2025-09-11 |
| DA Davidson | Maintain | Buy | 2025-09-10 |
| Ladenburg Thalmann | Upgrade | Buy | 2025-08-11 |
| Wedbush | Maintain | Outperform | 2025-08-08 |
Overall, SoundHound AI mostly maintains buy and outperform ratings with some neutral grades, indicating a generally positive outlook from analysts.
PagerDuty, Inc. Grades
The following table presents recent grades from reputable grading firms:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Truist Securities | Maintain | Buy | 2026-01-07 |
| RBC Capital | Downgrade | Sector Perform | 2026-01-05 |
| TD Cowen | Maintain | Buy | 2025-11-26 |
| Craig-Hallum | Downgrade | Hold | 2025-11-26 |
| Morgan Stanley | Maintain | Equal Weight | 2025-11-26 |
| RBC Capital | Maintain | Outperform | 2025-11-26 |
| Truist Securities | Maintain | Buy | 2025-11-19 |
| Baird | Maintain | Neutral | 2025-09-04 |
| RBC Capital | Maintain | Outperform | 2025-09-04 |
| Canaccord Genuity | Maintain | Buy | 2025-09-04 |
PagerDuty’s ratings show a mix of buy, outperform, hold, and sector perform grades, reflecting some analyst caution and mixed sentiment.
Which company has the best grades?
SoundHound AI holds a more consistently positive grade profile with multiple buy and outperform ratings and fewer neutral grades, compared to PagerDuty’s broader range of hold and downgrade actions. This suggests SoundHound AI currently enjoys stronger analyst confidence, which could impact investor sentiment favorably.
Strengths and Weaknesses
Below is a comparative overview of the key strengths and weaknesses of SoundHound AI, Inc. (SOUN) and PagerDuty, Inc. (PD) based on the most recent financial and operational data.
| Criterion | SoundHound AI, Inc. (SOUN) | PagerDuty, Inc. (PD) |
|---|---|---|
| Diversification | Revenue mainly from Hosted Services (57.2M), Licensing (17.6M), Professional Services (9.5M); moderate product mix | Limited product segmentation data; focus likely narrower |
| Profitability | Negative net margin (-414%), ROIC negative (-68%), shedding value but improving ROIC trend | Negative net margin (-9%), ROIC negative (-9.7%), also shedding value but improving |
| Innovation | High fixed asset turnover (14.3), indicating efficient use of assets in innovation | Even higher fixed asset turnover (16.6), suggesting strong operational efficiency |
| Global presence | Not explicitly detailed; likely moderate given hosted services growth | Not explicitly detailed; assumed similar tech sector presence |
| Market Share | Small relative scale; hosted services growing fast but still early stage | More established with steady revenue; market presence likely stronger |
Key takeaways: Both companies are currently value destroyers with negative profitability metrics, though each shows improving ROIC trends, suggesting potential future profitability. SoundHound’s revenue growth in hosted services indicates promising diversification, while PagerDuty’s operational efficiency is a notable strength. Investors should weigh risks carefully.
Risk Analysis
Below is a comparative table of key risks for SoundHound AI, Inc. and PagerDuty, Inc. based on the most recent data.
| Metric | SoundHound AI, Inc. (SOUN) | PagerDuty, Inc. (PD) |
|---|---|---|
| Market Risk | High beta (2.88) indicates high volatility | Low beta (0.63), lower volatility |
| Debt level | Very low debt-to-equity (0.02), low financial risk | High debt-to-equity (3.57), significant leverage |
| Regulatory Risk | Moderate, US tech sector exposure | Moderate, US & international markets exposure |
| Operational Risk | Negative profitability metrics, weak margins | Negative margins but better than SOUN, operational scale |
| Environmental Risk | Low direct risk, software focus | Low direct risk, software focus |
| Geopolitical Risk | Moderate, US-based with global clients | Moderate, with international operations |
SoundHound AI faces high market risk due to elevated volatility and poor profitability, despite low debt. PagerDuty’s more stable market risk contrasts with elevated financial leverage and distress-zone bankruptcy risk, making debt management the key concern. Both companies operate in competitive tech sectors with moderate regulatory and geopolitical exposure.
Which Stock to Choose?
SoundHound AI, Inc. (SOUN) shows strong revenue growth of 84.62% in 2024 but suffers from negative profitability, with net margin at -414.06% and ROE at -191.99%. Its debt levels are low, and the rating is very favorable despite an overall unfavorable financial ratios evaluation.
PagerDuty, Inc. (PD) experienced moderate revenue growth of 8.54% in 2025 with better profitability metrics, including a net margin of -9.14% and ROE at -32.92%. However, its debt ratios are higher and the overall rating is very favorable, with a mixed but slightly better financial ratios evaluation than SOUN.
Investors focused on high growth potential might find SOUN’s rapid revenue increase appealing despite its current profitability struggles, while those prioritizing financial stability and improving profitability metrics could lean towards PD, given its more balanced income statement and stronger ratings.
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 SoundHound AI, Inc. and PagerDuty, Inc. to enhance your investment decisions:
