SoundThinking (SSTI) vs. Its Rivals Critical Analysis

SoundThinking (NASDAQ:SSTI) is one of 953 publicly-traded companies in the “Software” industry, but how does it contrast to its peers? We will compare SoundThinking to similar companies based on the strength of its institutional ownership, risk, profitability, dividends, analyst recommendations, valuation and earnings.

Institutional and Insider Ownership

60.7% of SoundThinking shares are owned by institutional investors. Comparatively, 41.8% of shares of all “Software” companies are owned by institutional investors. 10.9% of SoundThinking shares are owned by insiders. Comparatively, 19.9% of shares of all “Software” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares SoundThinking and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
SoundThinking	$104.13 million	-$9.42 million	-6.46
SoundThinking Competitors	$1.80 billion	$385.92 million	109.80

SoundThinking’s peers have higher revenue and earnings than SoundThinking. SoundThinking is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a breakdown of recent ratings and target prices for SoundThinking and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SoundThinking	1	8	0	0	1.89
SoundThinking Competitors	5729	21455	44750	1492	2.57

SoundThinking presently has a consensus target price of $9.79, suggesting a potential upside of 17.48%. As a group, “Software” companies have a potential upside of 26.59%. Given SoundThinking’s peers stronger consensus rating and higher possible upside, analysts clearly believe SoundThinking has less favorable growth aspects than its peers.

Risk and Volatility

SoundThinking has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, SoundThinking’s peers have a beta of 1.34, suggesting that their average stock price is 34% more volatile than the S&P 500.

Profitability

This table compares SoundThinking and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SoundThinking	-16.92%	-23.77%	-12.90%
SoundThinking Competitors	-612.69%	20.88%	-8.98%

Summary

SoundThinking peers beat SoundThinking on 11 of the 13 factors compared.

SoundThinking Company Profile

SoundThinking, Inc., a public safety technology company that provides transformative solutions and strategic advisory services for law enforcement and civic leadership. Its SafetySmart Platform, an integrated suite of data-driven tools that enable law enforcement and community violence prevention and health organizations to be efficient in public safety outcomes. It offers ShotSpotter, an acoustic gunshot detection system; CrimeTracer, a law enforcement search engine; CaseBuilder, an investigation management system; and ResourceRouter, a software that directs patrol and community anti-violence resources to help maximize their impact. The company sells its solutions through its direct sales teams. The company was formerly known as ShotSpotter, Inc. and changed its name to SoundThinking, Inc. in April 2023. SoundThinking, Inc. was founded in 1996 and is headquartered in Fremont, California.