Critical Analysis: SoundThinking (SSTI) and Its Peers

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

Insider & Institutional Ownership

60.7% of SoundThinking shares are owned by institutional investors. Comparatively, 42.0% of shares of all “Software” companies are owned by institutional investors. 10.9% of SoundThinking shares are owned by company insiders. Comparatively, 20.0% of shares of all “Software” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

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

	Gross Revenue	Net Income	Price/Earnings Ratio
SoundThinking	$104.13 million	-$9.42 million	-6.47
SoundThinking Competitors	$1.91 billion	$387.74 million	108.87

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

Volatility & Risk

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

Profitability

This table compares SoundThinking and its competitors’ 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	-607.02%	22.93%	-8.85%

Analyst Recommendations

This is a breakdown of current recommendations for SoundThinking and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SoundThinking	1	8	0	0	1.89
SoundThinking Competitors	5748	21526	44879	1497	2.57

SoundThinking currently has a consensus target price of $9.79, indicating a potential upside of 17.33%. As a group, “Software” companies have a potential upside of 29.08%. Given SoundThinking’s competitors stronger consensus rating and higher probable upside, analysts plainly believe SoundThinking has less favorable growth aspects than its competitors.

Summary

SoundThinking competitors 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.