SoundHound AI (NASDAQ:SOUN) Trading Down 2.7% - Here's Why

Key Points

• SoundHound AI shares fell 2.7% to $6.97 in mid-day trading, with volume below its average. The stock has a $3.1 billion market capitalization and trades below its 200-day moving average.
• Analyst sentiment remains mixed but leans positive: the consensus rating is “Moderate Buy” with a $13.60 price target, despite recent target cuts from Piper Sandler and DA Davidson.
• The company’s latest quarterly results exceeded expectations, with EPS of negative $0.02 versus estimates of negative $0.13 and revenue of $61.9 million, up 45% year over year. However, SoundHound continues to report substantial losses and negative profitability metrics.

Shares of SoundHound AI, Inc. (NASDAQ:SOUN - Get Free Report) dropped 2.7% during mid-day trading on Thursday . The company traded as low as $6.88 and last traded at $6.97. 21,856,891 shares changed hands during trading, a decline of 24% from the average daily volume of 28,844,324 shares. The stock had previously closed at $7.16.

Analyst Ratings Changes

SOUN has been the subject of a number of recent research reports. Wall Street Zen raised SoundHound AI from a "strong sell" rating to a "sell" rating in a report on Saturday, August 15th. Weiss Ratings reaffirmed a "sell (e+)" rating on shares of SoundHound AI in a research report on Monday, June 15th. Piper Sandler lowered their price target on SoundHound AI from $8.00 to $7.00 and set a "neutral" rating for the company in a research report on Thursday, August 6th. LADENBURG THALM/SH SH upgraded SoundHound AI to a "strong-buy" rating in a research note on Wednesday, May 6th. Finally, DA Davidson cut their price objective on shares of SoundHound AI from $12.00 to $10.00 and set a "buy" rating on the stock in a report on Thursday, August 6th. One equities research analyst has rated the stock with a Strong Buy rating, four have given a Buy rating, three have assigned a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $13.60.

SoundHound AI Stock Performance

The stock has a market cap of $3.10 billion, a PE ratio of -18.34 and a beta of 2.64. The business has a 50 day moving average price of $6.70 and a two-hundred day moving average price of $7.42.

SoundHound AI (NASDAQ:SOUN - Get Free Report) last issued its quarterly earnings results on Wednesday, August 5th. The company reported ($0.02) EPS for the quarter, beating analysts' consensus estimates of ($0.13) by $0.11. SoundHound AI had a negative return on equity of 30.22% and a negative net margin of 67.45%.The company had revenue of $61.90 million during the quarter, compared to the consensus estimate of $52.38 million. During the same period last year, the business posted ($0.19) earnings per share. SoundHound AI's revenue was up 45.0% on a year-over-year basis. As a group, research analysts anticipate that SoundHound AI, Inc. will post -0.33 earnings per share for the current year.

Insider Buying and Selling at SoundHound AI

In other news, insider James Ming Hom sold 28,843 shares of the stock in a transaction that occurred on Monday, June 15th. The shares were sold at an average price of $7.46, for a total transaction of $215,168.78. Following the completion of the transaction, the insider directly owned 743,521 shares of the company's stock, valued at $5,546,666.66. This represents a 3.73% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, SVP Majid Emami sold 28,843 shares of the company's stock in a transaction that occurred on Monday, June 15th. The shares were sold at an average price of $7.46, for a total value of $215,168.78. Following the completion of the transaction, the senior vice president owned 472,983 shares in the company, valued at approximately $3,528,453.18. The trade was a 5.75% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 268,022 shares of company stock valued at $1,999,444 in the last three months. 8.84% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Several large investors have recently added to or reduced their stakes in SOUN. Handelsbanken Fonder AB boosted its position in shares of SoundHound AI by 17.4% in the second quarter. Handelsbanken Fonder AB now owns 124,000 shares of the company's stock valued at $802,000 after acquiring an additional 18,400 shares during the period. Focus Financial Network Inc. lifted its stake in SoundHound AI by 21.4% in the 2nd quarter. Focus Financial Network Inc. now owns 48,229 shares of the company's stock worth $312,000 after purchasing an additional 8,516 shares in the last quarter. IFC & Insurance Marketing Inc. boosted its holdings in SoundHound AI by 17.9% in the 2nd quarter. IFC & Insurance Marketing Inc. now owns 42,255 shares of the company's stock valued at $273,000 after purchasing an additional 6,427 shares during the period. Hennion & Walsh Asset Management Inc. boosted its holdings in SoundHound AI by 19.2% in the 2nd quarter. Hennion & Walsh Asset Management Inc. now owns 118,662 shares of the company's stock valued at $768,000 after purchasing an additional 19,133 shares during the period. Finally, Empowered Funds LLC grew its position in shares of SoundHound AI by 19.6% during the 1st quarter. Empowered Funds LLC now owns 13,896 shares of the company's stock valued at $95,000 after purchasing an additional 2,277 shares in the last quarter. Institutional investors own 19.28% of the company's stock.

SoundHound AI Company Profile

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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