SoundHound AI (NASDAQ:SOUN) Stock Rating Lowered by Wall Street Zen

Key Points

• Wall Street Zen downgraded SoundHound AI from “sell” to “strong sell,” although the broader analyst consensus remains “Moderate Buy” with a $13.60 target price.
• SoundHound AI reported a quarterly loss of $0.02 per share, beating estimates, while revenue rose 45% year over year to $61.9 million; however, the company remains unprofitable with a negative net margin of 67.45%.
• Insiders sold 269,365 shares worth about $2.0 million during the latest quarter, while the stock was trading near $6.74—well below its 12-month high of $22.17.

SoundHound AI (NASDAQ:SOUN - Get Free Report) was downgraded by equities researchers at Wall Street Zen from a "sell" rating to a "strong sell" rating in a research report issued on Saturday, Wall Street Zen reports.

Several other equities research analysts have also recently weighed in on the company. Piper Sandler dropped their price objective on SoundHound AI from $8.00 to $7.00 and set a "neutral" rating for the company in a report on Thursday, August 6th. Weiss Ratings reissued a "sell (e+)" rating on shares of SoundHound AI in a research note on Monday, June 15th. Finally, DA Davidson decreased their target price on SoundHound AI from $12.00 to $10.00 and set a "buy" rating for the company in a report on Thursday, August 6th. One equities research analyst has rated the stock with a Strong Buy rating, four have issued a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, SoundHound AI currently has an average rating of "Moderate Buy" and a consensus target price of $13.60.

SoundHound AI Stock Performance

SOUN stock opened at $6.74 on Friday. The firm's 50-day moving average price is $6.75 and its two-hundred day moving average price is $7.34. SoundHound AI has a 12-month low of $5.65 and a 12-month high of $22.17. The stock has a market capitalization of $2.99 billion, a price-to-earnings ratio of -17.74 and a beta of 2.66.

SoundHound AI (NASDAQ:SOUN - Get Free Report) last issued its quarterly earnings data on Wednesday, August 5th. The company reported ($0.02) EPS for the quarter, beating the consensus estimate of ($0.13) by $0.11. The firm had revenue of $61.90 million during the quarter, compared to the consensus estimate of $52.38 million. SoundHound AI had a negative net margin of 67.45% and a negative return on equity of 30.22%. The company's quarterly revenue was up 45.0% compared to the same quarter last year. During the same period in the prior year, the firm posted ($0.19) earnings per share. Equities analysts predict that SoundHound AI will post -0.33 EPS for the current year.

Insider Buying and Selling

In related news, CTO Timothy Stonehocker sold 18,802 shares of the stock in a transaction dated Monday, June 15th. The shares were sold at an average price of $7.46, for a total value of $140,262.92. Following the completion of the transaction, the chief technology officer directly owned 502,290 shares of the company's stock, valued at $3,747,083.40. This represents a 3.61% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Keyvan Mohajer sold 126,540 shares of the firm's stock in a transaction dated Monday, June 15th. The stock was sold at an average price of $7.46, for a total transaction of $943,988.40. Following the completion of the sale, the chief executive officer owned 1,947,237 shares of the company's stock, valued at $14,526,388.02. This trade represents a 6.10% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 269,365 shares of company stock valued at $2,009,047 over the last quarter. 8.84% of the stock is currently owned by insiders.

Institutional Investors Weigh In On SoundHound AI

Several hedge funds have recently made changes to their positions in SOUN. Danske Bank A S bought a new position in SoundHound AI in the third quarter worth $26,000. Northwestern Mutual Wealth Management Co. lifted its position in SoundHound AI by 83.1% during the second quarter. Northwestern Mutual Wealth Management Co. now owns 2,336 shares of the company's stock valued at $25,000 after buying an additional 1,060 shares during the period. Dogwood Wealth Management LLC boosted its holdings in shares of SoundHound AI by 152.1% during the 4th quarter. Dogwood Wealth Management LLC now owns 2,559 shares of the company's stock valued at $26,000 after buying an additional 1,544 shares in the last quarter. SHP Wealth Management bought a new stake in shares of SoundHound AI during the 4th quarter valued at $27,000. Finally, Parallel Advisors LLC boosted its holdings in shares of SoundHound AI by 42.8% during the 3rd quarter. Parallel Advisors LLC now owns 3,204 shares of the company's stock valued at $52,000 after buying an additional 960 shares in the last quarter. 19.28% of the stock is currently owned by institutional investors.

Key Stories Impacting SoundHound AI

Here are the key news stories impacting SoundHound AI this week:

• Positive Sentiment: LivePerson acquisition completed: SoundHound officially closed its acquisition of LivePerson, removing a major transaction uncertainty and combining SoundHound’s voice-AI technology with LivePerson’s customer-engagement and omnichannel capabilities. The enlarged platform is expected to broaden SoundHound’s customer base and revenue opportunities. SoundHound AI Completes Acquisition of LivePerson
• Positive Sentiment: New CFO appointed: John Collins will serve as CFO of the combined company, providing dedicated financial leadership as SoundHound integrates LivePerson and pursues its expansion strategy. SoundHound AI Completes Acquisition of LivePerson
• Positive Sentiment: Growth potential remains substantial: Prior coverage highlighted management’s projection for combined revenue of approximately $350 million to $400 million next year if the LivePerson deal closes. The acquisition could accelerate SoundHound’s scale across voice, customer-service and AI-agent applications. Where Will SoundHound AI Stock Be in 1 Year?
• Neutral Sentiment: Shareholder approval cleared the final major hurdle: LivePerson investors approved the transaction, allowing the companies to proceed to closing. The completed deal now shifts attention from regulatory and voting risk to integration, execution and the financial impact of the combination. SoundHound AI Wins Stockholder Approval
• Negative Sentiment: Valuation remains a concern: Despite a roughly 188% three-year gain, recent analysis continues to characterize SOUN as expensive on market multiples. Investors may demand evidence that the LivePerson acquisition can produce profitable growth before assigning the shares a higher valuation. Is SoundHound AI Getting Too Rich?
• Negative Sentiment: Profitability and post-earnings pressure persist: SoundHound’s latest quarter beat EPS and revenue expectations, with revenue up 45% year over year, but the company remains unprofitable. The stock has weakened since earnings as investors focus on future estimates, execution risk and the path to sustainable profits. Why Is SoundHound AI Down Since Its Last Earnings Report?
• Positive Sentiment: High short interest could amplify volatility: Nearly 40% short interest creates potential for a short squeeze if the acquisition produces strong operating results, although it also signals considerable skepticism among investors. SoundHound Stock and Short Interest

SoundHound AI Company Profile

SoundHound AI, Inc is a voice AI and conversational intelligence company specializing in speech recognition, natural language understanding and sound identification technologies. Founded in 2005 and headquartered in Santa Clara, California, the company initially gained recognition with its music discovery app before pivoting to enterprise-grade voice AI solutions. Over the years, SoundHound AI has built a comprehensive platform that enables developers and businesses to embed conversational intelligence into a wide range of products and services.

The company's core offering is the Houndify voice AI platform, which provides customizable speech-to-meaning technology, domain-specific natural language understanding and text-to-speech capabilities.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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