Contrasting Sound Group (NASDAQ:SOGP) & DoubleDown Interactive (NASDAQ:DDI)

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

Risk & Volatility

DoubleDown Interactive has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, Sound Group has a beta of 2.45, meaning that its share price is 145% more volatile than the S&P 500.

Institutional and 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 hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

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

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

DoubleDown Interactive currently has a consensus price target of $18.33, indicating a potential upside of 43.29%. Given DoubleDown Interactive’s stronger consensus rating and higher possible upside, equities analysts clearly believe DoubleDown Interactive is more favorable than Sound Group.

Profitability

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

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DoubleDown Interactive	$359.94 million	1.76	$102.50 million	$2.52	5.08
Sound Group	$3.44 billion	0.02	$32.39 million	($1.21)	-10.26

DoubleDown Interactive has higher earnings, but lower revenue 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.

Summary

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

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.

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.