SoundHound AISOUN -1.87%72 Return-on-Tangible-Equity is -61.33% as of Mar. 2026. GuruFocus rates SOUN with a GF Score™ of 72/100 and a GF Value™ of $11.75 (Possible Value Trap). The stock has 4 warning signs investors should review. Among 2,469 Software companies, SoundHound AI ranks worse than 93.16% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. SoundHound AI's annualized net income for the quarter that ended in Mar. 2026 was $-100.1 Mil. SoundHound AI's average shareholder tangible equity for the quarter that ended in Mar. 2026 was $163.2 Mil. Therefore, SoundHound AI's annualized Return-on-Tangible-Equity for the quarter that ended in Mar. 2026 was -61.33%.
The historical rank and industry rank for SoundHound AI's Return-on-Tangible-Equity or its related term are showing as below:
SOUN'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: -132.14 Med: -42.37 Max: -42.37
Current: -132.14
During the past 6 years, SoundHound AI's highest Return-on-Tangible-Equity was -42.37%. The lowest was -132.14%. And the median was -42.37%.
SOUN's Return-on-Tangible-Equity is ranked worse than 93.16% of 2469
companies
in the Software industry
Industry Median: 8.62
vs SOUN: -132.14
SoundHound AI (NAS:SOUN) Return-on-Tangible-Equity Explanation
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
SoundHound AI Return-on-Tangible-Equity Related Terms
SoundHound AI Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for SoundHound AI's Return-on-Tangible-Equity can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
SOUN vs WK, FRSH, FSLY: Return-on-Tangible-Equity Comparison
For the Software - Application subindustry, SoundHound AI's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
SoundHound AI Return-on-Tangible-Equity vs Software Industry
For the Software industry and Technology sector, SoundHound AI's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where SoundHound AI's Return-on-Tangible-Equity falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of -61.33% mean?
SoundHound AI (SOUN) has a Return-on-Tangible-Equity of -61.33% as of Mar. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on SoundHound AI and its competitors. According to the industry distribution chart, SoundHound AI ranks #2300 out of 2469 companies in the Software industry, placing it in the top 93.2%.
Is SoundHound AI's Return-on-Tangible-Equity too high?
SoundHound AI's current Return-on-Tangible-Equity is -61.33%. Based on the distribution chart, SoundHound AI ranks #2300 out of 2469 companies in the Software industry, which is in the bottom quartile relative to peers. Overall, SoundHound AI has a GF Score™ of 72/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does SoundHound AI's Return-on-Tangible-Equity compare to WK and FRSH?
According to the Software industry distribution chart, SoundHound AI ranks #2300 out of 2469 companies for Return-on-Tangible-Equity. This places SoundHound AI in the lower half of its industry. The industry median Return-on-Tangible-Equity is 8.62. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Return-on-Tangible-Equity for a Software company?
The median Return-on-Tangible-Equity among Software companies is 8.62, based on 2,469 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on SoundHound AI and its competitors. For the Software industry, the median Return-on-Tangible-Equity is 8.62 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. SoundHound AI's current Return-on-Tangible-Equity is -61.33%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is SoundHound AI stock overvalued right now?
Based on GuruFocus' analysis, SoundHound AI (SOUN) is currently considered Possible Value Trap. The stock's GF Value™ is $11.75, compared to a current price of $6.55 — trading 44.3% below its estimated fair value. The current Return-on-Tangible-Equity is -61.33%. SoundHound AI's overall GF Score™ is 72/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For SoundHound AI (SOUN), the current Return-on-Tangible-Equity is -61.33% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is SoundHound AI (SOUN) Overvalued in 2026?
Based on GuruFocus' analysis, SoundHound AI stock appears to be undervalued.
The current stock price of $6.55 is trading 44.3% below its estimated GF Value™ of $11.75.
GuruFocus considers SoundHound AI to be Possible Value Trap.
Key valuation signals for SOUN:
Return-on-Tangible-Equity: -61.33%
GF Value™: $11.75 vs. price of $6.55 (44.3% below fair value)
No single metric tells the full story. See the SOUN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
SoundHound AI Inc is an innovator of conversational intelligence, offering an independent Voice AI platform that enables businesses across industries to deliver high-quality conversational experiences to customers. The company's voice AI delivers speed and accuracy in numerous languages to product creators and service providers across retail, financial services, healthcare, automotive, smart devices, and restaurants via groundbreaking AI-driven products like Smart Answering, Smart Ordering, Dynamic Drive-Thru, and Amelia AI Agents.
72GF Score
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