SoundHound AI (NASDAQ:SOUN) Stock Falls 1.8% - Here's Why

Key Points

• SoundHound AI shares fell 1.8% to $4.88 in mid-day trading, with volume below the stock’s average. The company has a $2.17 billion market capitalization and its shares remain below both the 50-day and 200-day moving averages.
• Analyst sentiment is mixed: Piper Sandler and other firms lowered their price targets, while the overall consensus remains “Moderate Buy” with a $12.75 target price.
• SoundHound reported better-than-expected quarterly results, including $61.9 million in revenue—up 45% year over year—and an EPS loss of $0.02 versus estimates for a $0.13 loss. However, the company continues to post negative margins and return on equity, while insiders have sold shares largely to cover tax obligations.

SoundHound AI, Inc. (NASDAQ:SOUN - Get Free Report) shares traded down 1.8% during mid-day trading on Tuesday. The company traded as low as $4.85 and last traded at $4.88. Approximately 16,574,420 shares traded hands during trading, a decline of 39% from the average session volume of 27,164,604 shares. The stock had previously closed at $4.97.

Analyst Ratings Changes

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

SoundHound AI Trading Down 1.8%

The firm has a market cap of $2.17 billion, a P/E ratio of -12.84 and a beta of 2.73. The firm has a 50-day simple moving average of $6.53 and a 200-day simple moving average of $7.01.

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

Insider Activity

In other news, insider James Hom sold 38,730 shares of the firm's stock in a transaction dated Tuesday, September 15th. The shares were sold at an average price of $6.33, for a total value of $245,160.90. Following the sale, the insider directly owned 1,105,555 shares in the company, valued at approximately $6,998,163.15. This trade represents a 3.38% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. 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 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 transaction of $450,145.29. Following the completion of the transaction, the chief operating officer directly owned 2,600,231 shares in the company, valued at approximately $16,459,462.23. The trade was a 2.66% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last three months, insiders have sold 288,758 shares of company stock valued at $1,828,598. Company insiders own 8.84% of the company's stock.

Institutional Investors Weigh In On SoundHound AI

Several institutional investors have recently bought and sold shares of the company. NewEdge Advisors LLC increased its position in shares of SoundHound AI by 38.1% during the second quarter. NewEdge Advisors LLC now owns 132,072 shares of the company's stock worth $855,000 after purchasing an additional 36,415 shares in the last quarter. IFP Advisors Inc boosted its position in shares of SoundHound AI by 10.7% in the 2nd quarter. IFP Advisors Inc now owns 32,748 shares of the company's stock worth $212,000 after purchasing an additional 3,163 shares in the last quarter. Allworth Financial LP grew its stake in SoundHound AI by 12.7% during the 2nd quarter. Allworth Financial LP now owns 22,539 shares of the company's stock worth $146,000 after buying an additional 2,537 shares during the last quarter. Waverly Advisors LLC grew its stake in SoundHound AI by 6.9% during the 2nd 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 acquired a new position in SoundHound AI during the 2nd quarter valued at about $165,000. 19.28% of the stock is currently owned by institutional investors and hedge funds.

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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