SoundHound AI (NASDAQ:SOUN) Shares Up 3.1% - Still a Buy?

Key Points

• SoundHound AI shares rose 3.1% to $6.02 amid positive commercial developments, including deployment of its voice and generative AI technology in Kia’s Sorento in India and the addition of three quick-service restaurant chains.
• The company’s latest quarter showed 45% year-over-year revenue growth to $61.9 million and a smaller-than-expected loss, but SoundHound remains unprofitable with a negative net margin and analysts continue to express caution.
• Analyst views are mixed: the consensus rating is “Moderate Buy” with a $12.75 target, while Piper Sandler cut its target to $6 and other ratings include “sell” and “strong sell.” Elevated short interest could increase volatility, and insiders recently sold shares to cover tax obligations.

SoundHound AI, Inc. (NASDAQ:SOUN - Get Free Report) shares traded up 3.1% during mid-day trading on Wednesday. The stock traded as high as $6.15 and last traded at $6.02. 17,231,676 shares traded hands during trading, a decline of 38% from the average daily volume of 27,666,730 shares. The stock had previously closed at $5.84.

Key SoundHound AI News

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

• Positive Sentiment: Kia Sorento launch in India: SoundHound’s voice and real-time generative AI technology is now deployed in Kia’s Sorento SUV in India. The launch expands SoundHound’s presence in a large, fast-growing automotive market and supports the company’s strategy of winning international vehicle programs. Kia Sorento debuts SoundHound generative voice AI in India
• Positive Sentiment: Broader quick-service restaurant expansion: SoundHound added three restaurant chains to its customer base, while reporting 100% renewals among key accounts and broader rollouts. The developments indicate continued adoption of voice AI in the quick-service restaurant sector and could support future recurring revenue growth. SoundHound Adds 3 Restaurant Chains
• Positive Sentiment: Investor reaction: Coverage characterized the India product launch as a category-first milestone and linked it to the stock’s rise, suggesting that investors viewed the Kia deployment as evidence of growing commercial momentum. SoundHound AI Jumps on India Product Launch
• Neutral Sentiment: Short-squeeze interest: SoundHound remains a potential short-squeeze candidate because of elevated short interest and days to cover. This may amplify gains if positive catalysts continue, but it also increases volatility and does not change the company’s fundamentals. Short-Squeeze Candidates
• Negative Sentiment: Analyst caution: An analyst cut SoundHound’s price target to $6 while maintaining a neutral rating, signaling that valuation, execution, or profitability risks remain despite the company’s expanding customer footprint. SoundHound AI Stock Target Cut

Wall Street Analysts Forecast Growth

Several research analysts have weighed in on the company. Weiss Ratings reaffirmed a "sell (e+)" rating on shares of SoundHound AI in a research report on Friday, September 11th. Wall Street Zen downgraded shares of SoundHound AI from a "sell" rating to a "strong sell" rating in a research note on Saturday. Piper Sandler lowered their price target on SoundHound AI from $7.00 to $6.00 and set a "neutral" rating on the stock in a research report on Tuesday, September 22nd. Finally, DA Davidson cut their price objective on SoundHound AI from $12.00 to $10.00 and set a "buy" rating for the company in a research report on Thursday, August 6th. One investment analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus target price of $12.75.

SoundHound AI Stock Performance

The firm has a market cap of $2.68 billion, a P/E ratio of -15.87 and a beta of 2.66. The firm's fifty day moving average is $6.62 and its 200 day moving average is $7.10.

SoundHound AI (NASDAQ:SOUN - Get Free Report) last released its quarterly 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. The firm had revenue of $61.90 million for the quarter, compared to analysts' expectations of $52.38 million. SoundHound AI had a negative net margin of 67.45% and a negative return on equity of 30.22%. The business's revenue was up 45.0% on a year-over-year basis. During the same period in the prior year, the firm earned ($0.19) EPS. As a group, equities research analysts forecast that SoundHound AI, Inc. will post -0.32 EPS for the current year.

Insider Transactions at SoundHound AI

In other news, COO Michael Zagorsek sold 71,113 shares of the stock in a transaction that occurred on Tuesday, September 15th. The stock was sold at an average price of $6.33, for a total transaction of $450,145.29. Following the transaction, the chief operating officer owned 2,600,231 shares in the company, valued at approximately $16,459,462.23. This trade represents a 2.66% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Keyvan Mohajer sold 137,290 shares of SoundHound AI stock in a transaction that occurred on Tuesday, September 15th. The stock was sold at an average price of $6.33, for a total value of $869,045.70. Following the sale, the chief executive officer directly owned 3,684,947 shares of the company's stock, valued at approximately $23,325,714.51. The trade was a 3.59% 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 have sold a total of 288,758 shares of company stock worth $1,828,598 in the last ninety days. 8.84% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On SoundHound AI

A number of hedge funds and other institutional investors have recently modified their holdings of SOUN. Geode Capital Management LLC grew its stake in shares of SoundHound AI by 3.1% in the fourth quarter. Geode Capital Management LLC now owns 9,180,321 shares of the company's stock valued at $91,543,000 after acquiring an additional 273,097 shares in the last quarter. Swiss National Bank raised its stake in SoundHound AI by 3.7% in the 1st quarter. Swiss National Bank now owns 767,100 shares of the company's stock worth $5,270,000 after purchasing an additional 27,300 shares in the last quarter. California State Teachers Retirement System boosted its holdings in SoundHound AI by 25.0% in the 1st quarter. California State Teachers Retirement System now owns 440,023 shares of the company's stock valued at $3,023,000 after purchasing an additional 87,998 shares during the period. Virtu Financial LLC boosted its holdings in SoundHound AI by 43.9% in the 4th quarter. Virtu Financial LLC now owns 219,773 shares of the company's stock valued at $2,191,000 after purchasing an additional 67,088 shares during the period. Finally, Rockefeller Capital Management L.P. grew its position in shares of SoundHound AI by 3.5% during the 4th quarter. Rockefeller Capital Management L.P. now owns 179,327 shares of the company's stock worth $1,788,000 after purchasing an additional 6,096 shares in the last quarter. Institutional investors and hedge funds own 19.28% of the company's stock.

SoundHound AI Company Profile

SoundHound AI, Inc develops conversational artificial intelligence and voice-enabled technologies. Its platform is designed to let users interact with devices, applications and services through natural-language speech, supporting functions such as information retrieval, question answering and task completion.

The company's offerings include the Houndify conversational AI platform, which businesses can use to build branded voice assistants, as well as SoundHound Chat AI, an in-car and consumer-oriented voice assistant that combines conversational capabilities with access to information and services.

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