In the rapidly advancing field of artificial intelligence (AI), SoundHound Inc., known by its ticker symbol SOUN, has garnered significant interest. This company specializes in developing voice recognition technology and voice-activated assistants that find applications in sectors such as restaurants, automotive, television, and related industries. Over the past few years, SoundHound has seen rapid expansion, however, this growth can be attributed to a degree by strategic acquisitions. Despite this swift growth, the company still operates at a loss, reporting a deficit of $22.2 million on revenue of $29.1 million when considering adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
Since 2023, the stock’s value has significantly increased, reaching a market capitalization of approximately $4.5 billion. Despite this, the shares are currently trading at an elevated valuation, with a price-to-sales ratio of 41. It appears that profitability might be some time off in the future.
Keep reading to see two stocks that are likely to be more valuable than SoundHound AI in a year.
1. Sezzle
Recently, Sezzle (SEZL), a company that offers “Buy Now, Pay Later” services, has emerged as one of the most remarkable growth tales in the small-cap market.
The business sets itself apart from larger rivals by prioritizing customers in Buy Now Pay Later (BNPL) services, providing subscription goods for shopping virtually anywhere Visa is accepted. Additionally, it has developed features such as auto-couponing that applies coupons automatically for shoppers and a rewards program offering points for timely payments. Moreover, the company carefully monitors credit risk by discontinuing service to customers who miss payments, thereby minimizing potential losses.
In a nutshell, Sezzle’s most recent financial performance is quite impressive. Their revenue skyrocketed by an astounding 123%, reaching a total of $104.9 million. Furthermore, the volume of goods sold (gross merchandise volume) increased by 64.1% to an impressive $808.7 million.
Not only that, but their operating income surged by a staggering 261%, amounting to $49.9 million. This significant growth suggests that the company is not only successful, but also highly profitable. To top it off, their operational margins are now almost at a remarkable 50%.
The business is consistently introducing fresh product attributes, such as the Pay-in-5 payment plan that allows customers to split their payments into five equal portions instead of four; additional shopping resources like price comparison tools; and Money IQ, a system designed to incentivize consumers by rewarding them for increasing their financial literacy.
The anticipated growth rate for the company might slow down, but the potential in Buy Now Pay Later (BNPL) remains immense if they can maintain or increase their market share at the expense of credit and debit cards. Currently valued at $4.4 billion, Sezzle is nearly as valuable as SoundHound, and it’s significantly more profitable. It seems like a promising investment to surpass SoundHound in value within the next year.
2. Magnite
In simple terms, Magnite (MGNI) stands out as a significant player in the digital advertising sector, similar to Buy Now Pay Later (BNPL) and Artificial Intelligence, by acting as a primary supplier’s platform for publishers, such as online newspapers and streaming TV channels.
Following the sluggish phase in the post-pandemic timeframe, Magnite is now gaining traction, partially due to the expansion in Connected TV and the conclusion of an adjustment phase within the industry.
The business has formed alliances with firms such as The Trade Desk and Netflix, broadening its influence, and its profits are also growing.
Initially, the company’s income increased by only 4% compared to the same period last year, amounting to approximately $155.8 million. However, a different metric called contribution, which represents its primary operations, experienced a more substantial growth of 12%, reaching $145.8 million.
In this time frame, our Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) saw a significant increase of 47%, amounting to $36.8 million. Moreover, our adjusted earnings per share experienced a substantial rise, more than doubling from $0.05 to $0.12.
Our earnings before certain costs increased by 47% to reach $36.8 million, and our profit per share nearly doubled, going from $0.05 to $0.12 during this period.
Though the supply-side ad tech market is relatively smaller compared to its demand counterpart, Magnite stands as the foremost sell-side advertising firm. Its strategic collaborations with The Trade Desk and Netflix position it favorably for sustained growth in the future.
Currently, Magnite is valued at approximately $3.3 billion in market capitalization. To surpass SoundHound AI’s valuation without any movement in its stock, it would need to increase by roughly one third. Given its recent partnerships and the expanding connected-TV market, achieving this growth seems plausible.
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2025-07-19 13:16