SoundHound AI (NASDAQ:SOUN) Shares Down 7.4% - Time to Sell?

Key Points

• SoundHound AI shares fell 7.4% to $10.79 on Monday with 27.5 million shares traded (below the 44.1M average), giving the company a market cap of about $4.53 billion.
• Analysts are mixed but the consensus rating is a Moderate Buy with an average price target of $17.07, and several firms have recently raised targets (e.g., HC Wainwright to $26, Cantor Fitzgerald to $15).
• SoundHound beat Q3 EPS estimates (loss of $0.03 vs. -$0.09) and revenue rose 67.6% year-over-year, but it remains deeply unprofitable (negative net margin ~211% and negative ROE) and insiders have sold sizable stakes recently.

SoundHound AI, Inc. (NASDAQ:SOUN - Get Free Report) shares fell 7.4% on Monday . The company traded as low as $10.72 and last traded at $10.79. 27,511,531 shares changed hands during trading, a decline of 38% from the average session volume of 44,119,566 shares. The stock had previously closed at $11.65.

Analyst Upgrades and Downgrades

Several analysts have recently weighed in on the stock. Cantor Fitzgerald upgraded shares of SoundHound AI from a "neutral" rating to an "overweight" rating and lifted their target price for the company from $13.00 to $15.00 in a research report on Friday. HC Wainwright raised their target price on SoundHound AI from $18.00 to $26.00 and gave the stock a "buy" rating in a research report on Thursday, October 16th. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of SoundHound AI in a research note on Tuesday, October 14th. Oppenheimer began coverage on SoundHound AI in a research note on Thursday, September 11th. They set a "market perform" rating for the company. Finally, Piper Sandler upped their price objective on shares of SoundHound AI from $12.00 to $15.00 and gave the stock a "neutral" rating in a research note on Friday, November 7th. One research analyst has rated the stock with a Strong Buy rating, six have given a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $17.07.

SoundHound AI Trading Down 7.4%

The stock has a market capitalization of $4.53 billion, a P/E ratio of -12.85 and a beta of 2.63. The company has a fifty day simple moving average of $15.04 and a two-hundred day simple moving average of $13.40.

SoundHound AI (NASDAQ:SOUN - Get Free Report) last posted its quarterly earnings results on Thursday, November 6th. The company reported ($0.03) earnings per share for the quarter, topping analysts' consensus estimates of ($0.09) by $0.06. SoundHound AI had a negative net margin of 211.16% and a negative return on equity of 93.64%. The business had revenue of $42.05 million during the quarter, compared to the consensus estimate of $40.48 million. During the same period in the previous year, the firm posted ($0.04) earnings per share. SoundHound AI's revenue for the quarter was up 67.6% compared to the same quarter last year. As a group, analysts forecast that SoundHound AI, Inc. will post -0.38 earnings per share for the current fiscal year.

Insiders Place Their Bets

In other SoundHound AI news, CTO Timothy Stonehocker sold 70,524 shares of the stock in a transaction dated Wednesday, October 8th. The stock was sold at an average price of $20.00, for a total value of $1,410,480.00. Following the completion of the sale, the chief technology officer directly owned 606,525 shares in the company, valued at $12,130,500. This represents a 10.42% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CEO Keyvan Mohajer sold 118,654 shares of the company's stock in a transaction that occurred on Wednesday, October 8th. The shares were sold at an average price of $20.00, for a total transaction of $2,373,080.00. Following the completion of the transaction, the chief executive officer owned 2,342,613 shares of the company's stock, valued at $46,852,260. This trade represents a 4.82% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 787,260 shares of company stock worth $13,973,056 over the last ninety days. Company insiders own 9.17% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in SOUN. Sound Income Strategies LLC lifted its stake in SoundHound AI by 37.3% in the third quarter. Sound Income Strategies LLC now owns 2,116 shares of the company's stock valued at $34,000 after acquiring an additional 575 shares during the last quarter. Investors Research Corp raised its stake in SoundHound AI by 62.4% in the third quarter. Investors Research Corp now owns 1,822 shares of the company's stock valued at $29,000 after buying an additional 700 shares during the period. EP Wealth Advisors LLC lifted its position in shares of SoundHound AI by 5.3% in the second quarter. EP Wealth Advisors LLC now owns 14,100 shares of the company's stock valued at $151,000 after buying an additional 706 shares during the last quarter. Newbridge Financial Services Group Inc. boosted its stake in shares of SoundHound AI by 2.7% during the 3rd quarter. Newbridge Financial Services Group Inc. now owns 31,880 shares of the company's stock worth $513,000 after acquiring an additional 830 shares during the period. Finally, Insigneo Advisory Services LLC increased its holdings in shares of SoundHound AI by 7.4% during the 3rd quarter. Insigneo Advisory Services LLC now owns 12,416 shares of the company's stock worth $200,000 after acquiring an additional 858 shares during the last quarter. Institutional investors own 19.28% of the company's stock.

SoundHound AI Company Profile

SoundHound AI, Inc develops independent voice artificial intelligence (AI) solutions that enables businesses across automotive, TV, and IoT, and to customer service industries to deliver high-quality conversational experiences to their customers. Its products include Houndify platform that offers a suite of Houndify tools to help brands build conversational voice assistants, such as Application Programming Interfaces (API) for text and voice queries, support for custom commands, extensive library of content domains, inclusive software development kit platforms, collaboration capabilities, diagnostic tools, and built-in analytics; SoundHound Chat AI that integrates with knowledge domains, pulling real-time data like weather, sports, stocks, flight status, and restaurants; and SoundHound Smart Answering is built to offer customer establishments custom AI-powered voice assistant.

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