SoundHound AI (NASDAQ:SOUN) Shares Down 7.8% - Here's What Happened

Key Points

• SoundHound AI shares fell 7.8% to $4.97 in midday trading, with roughly 20.2 million shares changing hands. The stock remains below its 50-day and 200-day moving averages.
• Analyst views are mixed: the consensus rating is “Moderate Buy” with a $12.75 price target, although several firms recently lowered targets and one downgraded the stock to “Strong Sell.”
• The company reported better-than-expected quarterly results, including $61.9 million in revenue—up 45% year over year—and an adjusted loss of $0.02 per share versus the expected $0.13 loss. Insiders sold shares primarily to cover tax obligations tied to vested equity awards.

SoundHound AI, Inc. (NASDAQ:SOUN - Get Free Report)'s stock price was down 7.8% during mid-day trading on Monday. The company traded as low as $4.96 and last traded at $4.97. 20,218,903 shares changed hands during trading, a decline of 26% from the average daily volume of 27,217,262 shares. The stock had previously closed at $5.39.

Wall Street Analysts Forecast Growth

A number of research analysts recently issued reports on SOUN shares. Weiss Ratings reiterated a "sell (e+)" rating on shares of SoundHound AI in a report on Friday, September 11th. Piper Sandler decreased their target price on shares of SoundHound AI from $7.00 to $6.00 and set a "neutral" rating for the company in a research note on Tuesday, September 22nd. Wall Street Zen downgraded shares of SoundHound AI from a "sell" rating to a "strong sell" rating in a research report on Saturday, September 26th. Finally, DA Davidson reduced their target price on shares of SoundHound AI from $12.00 to $10.00 and set a "buy" rating for the company in a research note on Thursday, August 6th. One research analyst has rated the stock with a Strong Buy rating, three have assigned a Buy rating, two have given a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the stock has an average rating of "Moderate Buy" and a consensus price target of $12.75.

SoundHound AI Trading Down 7.8%

The firm has a market cap of $2.21 billion, a PE ratio of -13.08 and a beta of 2.73. The company has a 50 day moving average price of $6.55 and a 200 day moving average price of $7.02.

SoundHound AI (NASDAQ:SOUN - Get Free Report) last posted its earnings results on Wednesday, August 5th. The company reported ($0.02) earnings per share for the quarter, beating the consensus estimate of ($0.13) by $0.11. SoundHound AI had a negative net margin of 67.45% and a negative return on equity of 30.22%. The firm had revenue of $61.90 million during the quarter, compared to the consensus estimate of $52.38 million. During the same period last year, the firm posted ($0.19) EPS. The firm's revenue for the quarter was up 45.0% on a year-over-year basis. As a group, equities research analysts anticipate that SoundHound AI, Inc. will post -0.32 earnings per share for the current fiscal year.

Insider Activity

In other SoundHound AI news, insider James Hom sold 38,730 shares of the business's stock in a transaction on Tuesday, September 15th. The stock was sold at an average price of $6.33, for a total value of $245,160.90. Following the completion of the transaction, the insider directly owned 1,105,555 shares in the company, valued at approximately $6,998,163.15. The trade was a 3.38% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, COO Michael Zagorsek sold 71,113 shares of the business's stock in a transaction on Tuesday, September 15th. The shares were sold at an average price of $6.33, for a total value of $450,145.29. Following the completion of the transaction, the chief operating officer owned 2,600,231 shares of the company's stock, valued at $16,459,462.23. This trade represents a 2.66% 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. Over the last ninety days, insiders sold 288,758 shares of company stock worth $1,828,598. 8.84% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On SoundHound AI

Several hedge funds have recently made changes to their positions in SOUN. NewEdge Advisors LLC grew its stake in shares of SoundHound AI by 38.1% during the 2nd quarter. NewEdge Advisors LLC now owns 132,072 shares of the company's stock valued at $855,000 after buying an additional 36,415 shares during the period. IFP Advisors Inc increased its stake in SoundHound AI by 10.7% during the 2nd quarter. IFP Advisors Inc now owns 32,748 shares of the company's stock worth $212,000 after buying an additional 3,163 shares during the period. Allworth Financial LP lifted its stake in shares of SoundHound AI by 12.7% in the second quarter. Allworth Financial LP now owns 22,539 shares of the company's stock worth $146,000 after acquiring an additional 2,537 shares in the last quarter. Waverly Advisors LLC increased its stake in shares of SoundHound AI by 6.9% in the second quarter. Waverly Advisors LLC now owns 64,132 shares of the company's stock worth $415,000 after buying an additional 4,138 shares during the last quarter. Finally, Nykredit A S bought a new position in shares of SoundHound AI during the second quarter worth about $165,000. Institutional investors and hedge funds own 19.28% of the company's stock.

About SoundHound AI

SoundHound AI, Inc develops voice artificial intelligence technologies that enable people to interact with products and services using natural language. Its platform is designed to understand conversational speech, answer questions, and support voice-enabled experiences across automotive, restaurant, consumer electronics and other industries.

The company's offerings include the Houndify voice AI platform, which businesses can use to build customized voice assistants, and SoundHound Chat AI, a conversational assistant designed to provide responses and complete tasks through voice interaction.

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