Critical Review: Sound Group (NASDAQ:SOGP) vs. AppLovin (NASDAQ:APP)

AppLovin (NASDAQ:APP) and Sound Group (NASDAQ:SOGP) are both business services companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, analyst recommendations, risk, dividends and valuation.

Insider and Institutional Ownership

41.8% of AppLovin shares are owned by institutional investors. Comparatively, 1.6% of Sound Group shares are owned by institutional investors. 14.7% of AppLovin shares are owned by company insiders. Comparatively, 25.2% of Sound Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares AppLovin and Sound Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AppLovin	$3.96 billion	11.25	$356.71 million	$1.68	80.51
Sound Group	$2.24 billion	0.01	$12.54 million	$0.99	2.43

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for AppLovin and Sound Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AppLovin	1	3	11	0	2.67
Sound Group	0	0	0	0	N/A

AppLovin presently has a consensus price target of $106.44, suggesting a potential downside of 21.30%. Given AppLovin’s higher possible upside, research analysts plainly believe AppLovin is more favorable than Sound Group.

Volatility & Risk

AppLovin has a beta of 1.92, suggesting that its stock price is 92% more volatile than the S&P 500. Comparatively, Sound Group has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500.

Profitability

This table compares AppLovin and Sound Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AppLovin	20.89%	84.16%	15.82%
Sound Group	N/A	N/A	N/A

Summary

AppLovin beats Sound Group on 12 of the 13 factors compared between the two stocks.

About AppLovin

AppLovin Corporation engages in building a software-based platform for advertisers to enhance the marketing and monetization of their content in the United States and internationally. It operates through two segments, Software Platform and Apps. The company's software solutions include AppDiscovery, a marketing software solution, which matches advertiser demand with publisher supply through auctions; MAX, an in-app bidding software that optimizes the value of a publisher's advertising inventory by running a real-time competitive auction; Adjust, a measurement and analytics marketing platform that provides marketers with the visibility, insights, and tools needed to grow their apps from early stage to maturity; and Wurl, a connected TV platform, which distributes streaming video for content companies and provides advertising and publishing solutions through its AdPool, ContentDiscovery, and Global FAST Pass products. It also offers SparkLabs, which uses app store optimization to enhance ad visibility; AppLovin Exchange, which connects buyers to mobile and CTV devices through a single and direct RTB exchange; and Array, an end-to-end app management suite for mobile operators and end users. In addition, the company operates various free-to-play mobile games. It serves individuals, small and independent businesses, enterprises, advertisers and advertising networks, mobile app publishers, indie studio developers, and internet platforms. AppLovin Corporation was incorporated in 2011 and is headquartered in Palo Alto, California.

About Sound Group

Sound Group Inc. operates as an audio-centric social and entertainment company. It focuses on building audio platform to connect and communicate. The company, through its product portfolio and in-house technologies, caters to user interest in audio entertainment and social networking. The company was formerly known as LIZHI INC. and changed its name to Sound Group Inc. in January 2024. Sound Group Inc. was founded in 2010 and is based in Singapore.