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The Zacks Consensus Estimate for revenues is currently pegged at $13.01 million, suggesting growth of 48.69% from the year-ago quarter’s reported figure.
The consensus mark for loss is pegged at 9 cents per share, unchanged over the past 30 days. SOUN reported a loss of 10 cents per share in the year-ago quarter.
SOUN’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing once and was in line with the remaining quarter’s estimate, the earnings surprise being 4.72%, on average.
SoundHound AI, Inc. Price, Consensus and EPS Surprise
Let’s see how things are shaping up prior to this announcement.
Factors to Note
SOUN offers conversational intelligence through independent Voice AI solutions in 25 languages in both cloud-enabled and hardware-embedded devices. It is likely to have benefited from the growing demand for its conversational AI platform, owing to the increasing popularity of Generative AI (GenAI) and large language models.
SoundHound AI is benefiting from a strong portfolio, a strong partner base and an expanding clientele. The demand for AI-driven customer service solutions, particularly in the restaurant and auto sectors, is expected to remain a key factor in driving SOUN’s performance in the to-be-reported quarter.
SoundHound's offerings, such as Smart Ordering, Employee Assist, and Smart Answering, cater to this demand and are expected to have contributed to revenue growth in the second quarter.
SoundHound AI had $682 million in cumulative subscriptions and bookings backlog at the end of the first quarter of 2024, up 80% year over year, with an average duration of about seven years. This reflects the strong demand for SOUN’s solutions, which is expected to have benefited second quarter results.
SOUN Stock Outperforms Sector
Year to date, SOUN shares have surged 99% year to date, outperforming the broader Zacks Computer & Technology sector’s return of 14.3% and the Zacks IT Services industry’s decline of 1.7%.
SoundHound AI has outperformed industry peers like ServiceNow (NOW - Free Report) , Infosys (INFY - Free Report) and Vertiv (VRT - Free Report) over the same timeframe. NOW, INFY and VRT shares have gained 10.6%, 13.2% and 41%, respectively.
YTD Performance
Image Source: Zacks Investment Research
However, SOUN stock is not so cheap, as the Value Style Score of F suggests a stretched valuation at this moment.
In terms of the forward 12-month Price/Sales ratio, SoundHound AI is trading at 15.37X, higher than its median of 9.2X and the Zacks Computer & Technology sector’s 6.06X.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
SOUN Stock to Benefit From Expanding Footprint
SoundHound AI’s prospects benefit from a massive addressable market worth more than $140 billion that includes diverse industries like automotive, restaurants, customer service, entertainment, Smart TVs and Internet of Things (IoT) powered devices. It has more than 270 patents currently, with over 155 granted and more than 115 pending.
Automotive presents a significant growth opportunity for SOUN. TAM for the global light vehicle auto market is currently pegged at roughly 88 million and is expected to hit 95 million units by 2028. TAM for the restaurant market is currently pegged at roughly $3.3 trillion and is expected to hit $4.4 trillion units by 2028, thereby offering significant growth prospects for SoundHound AI.
SOUN has strengthened its footprint in the automotive industry by introducing its advanced SoundHound Chat AI voice assistant, integrated with ChatGPT, into Peugeot, Opel and Vauxhall vehicles across 11 European markets, including Austria, France, Germany, Italy, Spain and the U.K. SOUN’s collaborations with NVIDIA, ARM, Perplexity, Olo and Oracle are expanding its portfolio.
SOUN’s acquisition of SYNQ3 bolstered its presence in the restaurant sector, contributing positively to the revenue mix and customer base expansion. The acquisition of SYNQ3 added approximately $3 million to SoundHound’s revenue in the first quarter of 2024.
The acquisition of key assets from Allset, an online ordering platform that connects restaurants with local customers, enhanced its capabilities in Voice AI.
Conclusion
SoundHound AI is a risky bet for growth-oriented investors, given the uncharted Voice AI domain. However, its innovative portfolio makes SOUN well-positioned to benefit from the strong TAM of global automotive and restaurant markets.
Image: Bigstock
Pre-Q2 Earnings: Is SoundHound AI (SOUN) a Portfolio Must-Have?
SoundHound AI (SOUN - Free Report) is scheduled to report its second-quarter 2024 results on Aug 8.
The Zacks Consensus Estimate for revenues is currently pegged at $13.01 million, suggesting growth of 48.69% from the year-ago quarter’s reported figure.
The consensus mark for loss is pegged at 9 cents per share, unchanged over the past 30 days. SOUN reported a loss of 10 cents per share in the year-ago quarter.
SOUN’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing once and was in line with the remaining quarter’s estimate, the earnings surprise being 4.72%, on average.
SoundHound AI, Inc. Price, Consensus and EPS Surprise
SoundHound AI, Inc. price-consensus-eps-surprise-chart | SoundHound AI, Inc. Quote
Let’s see how things are shaping up prior to this announcement.
Factors to Note
SOUN offers conversational intelligence through independent Voice AI solutions in 25 languages in both cloud-enabled and hardware-embedded devices. It is likely to have benefited from the growing demand for its conversational AI platform, owing to the increasing popularity of Generative AI (GenAI) and large language models.
SoundHound AI is benefiting from a strong portfolio, a strong partner base and an expanding clientele. The demand for AI-driven customer service solutions, particularly in the restaurant and auto sectors, is expected to remain a key factor in driving SOUN’s performance in the to-be-reported quarter.
SoundHound's offerings, such as Smart Ordering, Employee Assist, and Smart Answering, cater to this demand and are expected to have contributed to revenue growth in the second quarter.
SoundHound AI had $682 million in cumulative subscriptions and bookings backlog at the end of the first quarter of 2024, up 80% year over year, with an average duration of about seven years. This reflects the strong demand for SOUN’s solutions, which is expected to have benefited second quarter results.
SOUN Stock Outperforms Sector
Year to date, SOUN shares have surged 99% year to date, outperforming the broader Zacks Computer & Technology sector’s return of 14.3% and the Zacks IT Services industry’s decline of 1.7%.
SoundHound AI has outperformed industry peers like ServiceNow (NOW - Free Report) , Infosys (INFY - Free Report) and Vertiv (VRT - Free Report) over the same timeframe. NOW, INFY and VRT shares have gained 10.6%, 13.2% and 41%, respectively.
YTD Performance
Image Source: Zacks Investment Research
However, SOUN stock is not so cheap, as the Value Style Score of F suggests a stretched valuation at this moment.
In terms of the forward 12-month Price/Sales ratio, SoundHound AI is trading at 15.37X, higher than its median of 9.2X and the Zacks Computer & Technology sector’s 6.06X.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
SOUN Stock to Benefit From Expanding Footprint
SoundHound AI’s prospects benefit from a massive addressable market worth more than $140 billion that includes diverse industries like automotive, restaurants, customer service, entertainment, Smart TVs and Internet of Things (IoT) powered devices. It has more than 270 patents currently, with over 155 granted and more than 115 pending.
Automotive presents a significant growth opportunity for SOUN. TAM for the global light vehicle auto market is currently pegged at roughly 88 million and is expected to hit 95 million units by 2028. TAM for the restaurant market is currently pegged at roughly $3.3 trillion and is expected to hit $4.4 trillion units by 2028, thereby offering significant growth prospects for SoundHound AI.
SOUN has strengthened its footprint in the automotive industry by introducing its advanced SoundHound Chat AI voice assistant, integrated with ChatGPT, into Peugeot, Opel and Vauxhall vehicles across 11 European markets, including Austria, France, Germany, Italy, Spain and the U.K. SOUN’s collaborations with NVIDIA, ARM, Perplexity, Olo and Oracle are expanding its portfolio.
SOUN’s acquisition of SYNQ3 bolstered its presence in the restaurant sector, contributing positively to the revenue mix and customer base expansion. The acquisition of SYNQ3 added approximately $3 million to SoundHound’s revenue in the first quarter of 2024.
The acquisition of key assets from Allset, an online ordering platform that connects restaurants with local customers, enhanced its capabilities in Voice AI.
Conclusion
SoundHound AI is a risky bet for growth-oriented investors, given the uncharted Voice AI domain. However, its innovative portfolio makes SOUN well-positioned to benefit from the strong TAM of global automotive and restaurant markets.
This Zacks Rank #2 (Buy) stock has a Momentum Style Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.