SoundHound AI (SoundHound AI) Predictability Rank

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What is SoundHound AI Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

SoundHound AI Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

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SoundHound AI (SoundHound AI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » SoundHound AI Inc (NAS:SOUN) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

5400 Betsy Ross Drive, Santa Clara, CA, USA, 95054

Website

https://www.soundhound.com

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.

Executives

Timothy Stonehocker	officer: Chief Technology Officer	5400 BETSY ROSS DRIVE, SANTA CLARA CA 95054
Michael Zagorsek	officer: Chief Operating Officer	5400 BETSY ROSS DRIVE, SANTA CLARA CA 95054
Lawrence Marcus	director	2105 WOODSIDE RD., WOODSIDE CA 94062
Nitesh Sharan	officer: Chief Financial Officer	5400 BETSY ROSS DRIVE, SANTA CLARA CA 95054
Keyvan Mohajer	director, 10 percent owner, officer: CEO	5400 BETSY ROSS DRIVE, SANTA CLARA CA 95054
Majid Emami	10 percent owner, officer: VP, Engineering	5400 BETSY ROSS DRIVE, SANTA CLARA CA 95054
James Ming Hom	director, officer: VP, Products	5400 BETSY ROSS DRIVE, SANTA CLARA CA 95054
Diana Sroka	director	5400 BETSY ROSS DRIVE, SANTA CLARA CA 95054
Eric R. Ball	director	C/O GLU MOBILE INC., 45 FREMONT STREET, SUITE 2800, SAN FRANCISCO CA 94105
Global Catalyst Partners Iii L P	10 percent owner	6239 MOJAVE DRIVE, SAN JOSE CA 95120
Zubin Irani	officer: Chief Revenue Officer	5400 BETSY ROSS DRIVE, SANTA CLARA CA 95054
Global Catalyst Venture Management Iii, Llc	10 percent owner	6239 MOJAVE DRIVE, SAN JOSE CA 95120
Stephen N Cannon	director, 10 percent owner, officer: Chief Executive Officer	13/F TOWER 2, NEW WORLD TOWER, 18 QUEENS ROAD CENTRAL, HONG KONG K3 K3 00000
Bryant B Edwards	director	25/28 OLD BURLINGTON STREET, LONDON X0 W1S 3AN
Daniel L Sheehan	officer: Chief Operating Officer	38 KEYES AVENUE SUITE 204, SAN FRANCISCO CA 94129