SoundHound AI (NASDAQ:SOUN) Stock Price Down 6.3% - Here's What Happened

Key Points

• SoundHound AI shares fell 6.3% on Tuesday, trading between $6.76 and $7.02 as volume came in slightly below its recent average.
• The company’s latest earnings showed revenue growth of 51.7% year over year to $44.2 million, but EPS of -$0.06 missed expectations by a penny and profitability remained deeply negative.
• Analyst sentiment is still mixed but constructive: SoundHound AI has a Moderate Buy consensus with a $14.93 target price, while recent insider sales and a stock price below its 50-day and 200-day averages may have added pressure.

Shares of SoundHound AI, Inc. (NASDAQ:SOUN - Get Free Report) dropped 6.3% on Tuesday . The company traded as low as $6.76 and last traded at $7.02. Approximately 25,801,289 shares changed hands during trading, a decline of 6% from the average daily volume of 27,509,656 shares. The stock had previously closed at $7.49.

Wall Street Analysts Forecast Growth

SOUN has been the topic of a number of analyst reports. DA Davidson reaffirmed a "buy" rating and set a $14.00 price objective on shares of SoundHound AI in a research report on Wednesday, April 22nd. Piper Sandler reaffirmed a "neutral" rating and issued a $9.00 price objective (down from $11.00) on shares of SoundHound AI in a research note on Friday, February 27th. HC Wainwright dropped their price objective on SoundHound AI from $26.00 to $20.00 and set a "buy" rating for the company in a research note on Monday, March 2nd. LADENBURG THALM/SH SH raised SoundHound AI to a "strong-buy" rating in a research note on Wednesday, May 6th. Finally, Zacks Research raised SoundHound AI from a "strong sell" rating to a "hold" rating in a research note on Monday, February 9th. One analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating, three have issued a Hold rating and one has issued a Sell rating to the company. According to MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus target price of $14.93.

SoundHound AI Stock Down 6.3%

The business has a 50 day moving average of $7.87 and a 200 day moving average of $9.04. The company has a market capitalization of $3.04 billion, a P/E ratio of -14.94 and a beta of 2.56.

SoundHound AI (NASDAQ:SOUN - Get Free Report) last announced its quarterly earnings results on Thursday, May 7th. The company reported ($0.06) EPS for the quarter, missing analysts' consensus estimates of ($0.05) by ($0.01). SoundHound AI had a negative net margin of 91.84% and a negative return on equity of 40.15%. The firm had revenue of $44.20 million for the quarter, compared to the consensus estimate of $42.56 million. During the same period in the previous year, the company posted ($0.06) earnings per share. SoundHound AI's quarterly revenue was up 51.7% on a year-over-year basis. On average, research analysts anticipate that SoundHound AI, Inc. will post -0.45 EPS for the current year.

Insider Activity at SoundHound AI

In other SoundHound AI news, insider James Ming Hom sold 31,019 shares of the company's stock in a transaction that occurred on Friday, March 20th. The stock was sold at an average price of $6.79, for a total transaction of $210,619.01. Following the sale, the insider directly owned 772,364 shares in the company, valued at $5,244,351.56. This represents a 3.86% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at this link. Also, CFO Nitesh Sharan sold 44,027 shares of the company's stock in a transaction that occurred on Friday, March 20th. The shares were sold at an average price of $6.79, for a total value of $298,943.33. Following the sale, the chief financial officer owned 1,661,121 shares in the company, valued at approximately $11,279,011.59. This trade represents a 2.58% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 307,973 shares of company stock valued at $2,091,110 in the last 90 days. 8.84% of the stock is currently owned by insiders.

Institutional Investors Weigh In On SoundHound AI

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Vanguard Group Inc. raised its position in SoundHound AI by 4.4% during the fourth quarter. Vanguard Group Inc. now owns 45,367,437 shares of the company's stock valued at $452,313,000 after purchasing an additional 1,909,868 shares during the period. Geode Capital Management LLC raised its position in SoundHound AI by 3.1% during the fourth quarter. Geode Capital Management LLC now owns 9,180,321 shares of the company's stock valued at $91,543,000 after purchasing an additional 273,097 shares during the period. Morgan Stanley raised its position in SoundHound AI by 48.1% during the fourth quarter. Morgan Stanley now owns 8,987,522 shares of the company's stock valued at $89,606,000 after purchasing an additional 2,917,280 shares during the period. State Street Corp raised its position in SoundHound AI by 0.9% during the fourth quarter. State Street Corp now owns 8,691,235 shares of the company's stock valued at $86,652,000 after purchasing an additional 80,908 shares during the period. Finally, UBS Group AG raised its holdings in shares of SoundHound AI by 77.6% in the fourth quarter. UBS Group AG now owns 6,124,283 shares of the company's stock worth $61,059,000 after buying an additional 2,676,707 shares during the period. 19.28% of the stock is currently owned by hedge funds and other institutional investors.

About SoundHound AI

SoundHound AI, Inc is a voice AI and conversational intelligence company specializing in speech recognition, natural language understanding and sound identification technologies. Founded in 2005 and headquartered in Santa Clara, California, the company initially gained recognition with its music discovery app before pivoting to enterprise-grade voice AI solutions. Over the years, SoundHound AI has built a comprehensive platform that enables developers and businesses to embed conversational intelligence into a wide range of products and services.

The company's core offering is the Houndify voice AI platform, which provides customizable speech-to-meaning technology, domain-specific natural language understanding and text-to-speech capabilities.

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