Analyzing DoubleDown Interactive (NASDAQ:DDI) and Sound Group (NASDAQ:SOGP)

Sound Group (NASDAQ:SOGP) and DoubleDown Interactive (NASDAQ:DDI) are both small-cap communication services companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, profitability, institutional ownership, risk and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sound Group	N/A	N/A	N/A
DoubleDown Interactive	32.91%	12.93%	11.81%

Earnings & Valuation

This table compares Sound Group and DoubleDown Interactive”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Group	$443.69 million	0.12	$32.39 million	($1.21)	-9.77
DoubleDown Interactive	$380.04 million	1.67	$102.50 million	$2.52	5.09

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Sound Group and DoubleDown Interactive, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Group	0	1	0	0	2.00
DoubleDown Interactive	0	3	2	0	2.40

DoubleDown Interactive has a consensus target price of $18.33, indicating a potential upside of 43.01%. Given DoubleDown Interactive’s stronger consensus rating and higher possible upside, analysts clearly believe DoubleDown Interactive is more favorable than Sound Group.

Volatility & Risk

Sound Group has a beta of 2.48, meaning that its stock price is 148% more volatile than the S&P 500. Comparatively, DoubleDown Interactive has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.

Institutional & Insider Ownership

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

Summary

DoubleDown Interactive beats Sound Group on 10 of the 14 factors compared between the two stocks.

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.

About DoubleDown Interactive

DoubleDown Interactive Co., Ltd. engages in the development and publishing of casual games and mobile applications in South Korea. It publishes digital gaming content on mobile and web platforms. The company offers DoubleDown Casino, DoubleDown Classic, DoubleDown Fort Knox, and cash me out games, as well as sells in-game virtual chips. Its games are primarily distributed, marketed, and promoted through third party platform providers. The company was formerly known as The8Games Co., Ltd. and changed its name to DoubleDown Interactive Co., Ltd. in December 2019. The company was incorporated in 2008 and is headquartered in Seoul, South Korea. DoubleDown Interactive Co., Ltd. is a subsidiary of DoubleU Games Co., Ltd.