SoundHound AI (NASDAQ:SOUN) Stock Falls 2% - Here's Why

Key Points

• SoundHound AI shares fell 2% to $5.52 on Thursday, with trading volume 38% below the stock’s average daily volume. The stock remains below its 50-day and 200-day moving averages of $6.58 and $7.03, respectively.
• Analyst views remain mixed: Piper Sandler cut its price target to $6 and maintained a neutral rating, while DA Davidson lowered its target to $10 but kept a buy rating. Overall, the stock has a “Moderate Buy” consensus and an average price target of $12.75.
• The company’s latest quarter showed stronger-than-expected results, with revenue rising 45% year over year to $61.9 million and a loss of $0.02 per share versus the estimated $0.13 loss. However, SoundHound remains unprofitable, with a negative net margin of 67.45%, and insiders sold shares primarily to cover tax obligations tied to equity awards.

Shares of SoundHound AI, Inc. (NASDAQ:SOUN - Get Free Report) traded down 2% during trading on Thursday. The company traded as low as $5.45 and last traded at $5.52. 16,843,196 shares changed hands during mid-day trading, a decline of 38% from the average daily volume of 27,332,260 shares. The stock had previously closed at $5.63.

Analyst Ratings Changes

Several equities analysts have recently weighed in on SOUN shares. 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 report on Tuesday, September 22nd. 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 report on Thursday, August 6th. Wall Street Zen downgraded SoundHound AI from a "sell" rating to a "strong sell" rating in a report on Saturday, September 26th. Finally, Weiss Ratings reissued a "sell (e+)" rating on shares of SoundHound AI in a research report on Friday, September 11th. One research 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 given a Sell rating to the company. According to MarketBeat.com, SoundHound AI presently has a consensus rating of "Moderate Buy" and an average price target of $12.75.

SoundHound AI Stock Performance

The firm's fifty day moving average is $6.58 and its two-hundred day moving average is $7.03. The company has a market cap of $2.45 billion, a P/E ratio of -14.53 and a beta of 2.73.

SoundHound AI (NASDAQ:SOUN - Get Free Report) last announced its quarterly earnings data 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. SoundHound AI had a negative net margin of 67.45% and a negative return on equity of 30.22%. The business had revenue of $61.90 million during the quarter, compared to analyst estimates of $52.38 million. During the same period last year, the firm posted ($0.19) EPS. The company's revenue was up 45.0% on a year-over-year basis. On average, equities research analysts expect that SoundHound AI, Inc. will post -0.32 EPS for the current year.

Insider Activity

In other SoundHound AI news, CEO Keyvan Mohajer sold 137,290 shares of the company'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 $869,045.70. Following the completion of the sale, the chief executive officer directly owned 3,684,947 shares in the company, valued at approximately $23,325,714.51. This represents a 3.59% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, SVP Majid Emami sold 38,730 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 transaction of $245,160.90. Following the sale, the senior vice president directly owned 834,253 shares in the company, valued at $5,280,821.49. This trade represents a 4.44% decrease in their ownership of the stock. 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 quarter, insiders sold 288,758 shares of company stock valued at $1,828,598. Company insiders own 8.84% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the business. Hollencrest Capital Management boosted its position in SoundHound AI by 197.5% during the first quarter. Hollencrest Capital Management now owns 3,615 shares of the company's stock worth $25,000 after purchasing an additional 2,400 shares in the last quarter. SHP Wealth Management purchased a new position in shares of SoundHound AI during the 4th quarter valued at approximately $27,000. Vermillion Wealth Management Inc. grew its stake in SoundHound AI by 92.0% in the 1st quarter. Vermillion Wealth Management Inc. now owns 9,200 shares of the company's stock valued at $63,000 after acquiring an additional 4,409 shares during the period. Clarus Group Inc. acquired a new position in SoundHound AI during the first quarter worth $69,000. Finally, 180 Wealth Advisors LLC acquired a new stake in shares of SoundHound AI in the first quarter valued at about $69,000. 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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