Analyzing Palladyne AI (NASDAQ:PDYN) & SoundThinking (NASDAQ:SSTI)

Palladyne AI (NASDAQ:PDYN) and SoundThinking (NASDAQ:SSTI) are both small-cap business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Palladyne AI and SoundThinking, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palladyne AI	0	0	1	0	3.00
SoundThinking	0	2	3	1	2.83

Palladyne AI currently has a consensus target price of $15.00, indicating a potential upside of 77.51%. SoundThinking has a consensus target price of $21.20, indicating a potential upside of 56.34%. Given Palladyne AI’s stronger consensus rating and higher possible upside, research analysts clearly believe Palladyne AI is more favorable than SoundThinking.

Profitability

This table compares Palladyne AI and SoundThinking’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Palladyne AI	-722.22%	-56.81%	-37.45%
SoundThinking	-1.39%	-8.74%	-4.57%

Risk & Volatility

Palladyne AI has a beta of 3.9, suggesting that its share price is 290% more volatile than the S&P 500. Comparatively, SoundThinking has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500.

Earnings and Valuation

This table compares Palladyne AI and SoundThinking”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Palladyne AI	$6.15 million	41.37	-$115.59 million	($2.16)	-3.91
SoundThinking	$92.72 million	1.84	-$2.72 million	($0.12)	-112.99

SoundThinking has higher revenue and earnings than Palladyne AI. SoundThinking is trading at a lower price-to-earnings ratio than Palladyne AI, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

26.0% of Palladyne AI shares are held by institutional investors. Comparatively, 60.7% of SoundThinking shares are held by institutional investors. 12.0% of Palladyne AI shares are held by insiders. Comparatively, 9.2% of SoundThinking shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

SoundThinking beats Palladyne AI on 9 of the 15 factors compared between the two stocks.

About Palladyne AI

Palladyne AI Corp., a software company, focuses on delivering software that enhances the utility and functionality of third-party stationary and mobile robotic systems in the United States. Its Artificial Intelligence (AI)/ Machine Learning (ML) software platform enables robots to observe, learn, reason, and act in structured and unstructured environments. The company's software platform enables robotic systems to perceive their environment and quickly adapt to changing circumstances by generalizing from their experience using dynamic real-time operations without extensive programming and with minimal robot training. It serves customers from various industries, such as industrial manufacturing, warehousing and logistics, defense, infrastructure maintenance and repair, energy, aerospace and aviation, and others. The company was formerly known as Sarcos Technology and Robotics Corporation and changed its name to Palladyne AI Corp. in March 2024. Palladyne AI Corp. was founded in 2017 and is headquartered in Salt Lake City, Utah.

About SoundThinking

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.