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It 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 17.2%, 22.1% and 62.5%, respectively.
SoundHound AI shares have been benefiting from a strong portfolio, a solid partner base and an expanding clientele. SOUN offers conversational intelligence through independent Voice AI solutions in 25 languages in both cloud-enabled and hardware-embedded devices.
Its 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 powered devices.
However, SOUN’s unimpressive second-quarter 2024 results bring this question into investors’ minds - is it too late to jump into SoundHound AI’s bull run?
Let’s dig deep to find out.
SOUN Stock Beats Sector YTD
Image Source: Zacks Investment Research
SoundHound AI’s Q2 Earnings Miss Estimates, Revenues Meet
SoundHound AI reported a loss of 11 cents per share, wider than the Zacks Consensus Estimate of a loss of 9 cents. It reported revenues of $13 million, in line with the consensus mark, but up 54% year over year.
SoundHound AI had $723 million in cumulative subscriptions and bookings backlog at the end of the second quarter of 2024, which doubled year over year. The annual run rate jumped 90% year over year to more than 5 billion queries.
SOUN’s liquidity position was strong, with a cash balance of $201 million at the end of the second quarter. It prepaid $100 million in debt, which saves more than $55 million in interest and fees.
It now expects revenues to be $80 million and $150 million for 2024 and 2025, respectively, including the contribution from the recently announced acquisition of Amelia.
The Zacks Consensus Estimate for SOUN’s 2024 revenues is pegged at $82.59 million, indicating year-over-year growth of 80.05%. The consensus mark for 2024 loss is pegged at 36 cents per share, which has widened by four cents over the past 30 days.
The Zacks Consensus Estimate for SOUN’s 2025 revenues is pegged at $151.87 million, indicating year-over-year growth of 83.87%. The consensus mark for 2025 loss is pegged at 21 cents per share, unchanged over the past 30 days.
SOUN stock is not so cheap, as the Value 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 14.02X, higher than the Zacks Computer & Technology sector’s 6.35X.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
SOUN Stock to Benefit From Expanding Footprint
SoundHound AI’s prospects benefit from its expanding footprint in industries like automotive and restaurants, driven by its innovative portfolio. It has more than 270 patents currently, with over 155 granted and more than 115 pending.
The strong demand for SoundHound Chat AI and AI Customer Service solutions is noteworthy. Generative AI (GenAI) presents a significant growth opportunity for SoundHound AI’s prospects. Enterprise spending on GenAI is projected to grow 15-fold over the next three years to nearly $250 billion.
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.
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. SoundHound AI launched an advanced in-vehicle voice assistant leveraging NVIDIA DRIVE, enabling real-time and generative AI capabilities for seamless, offline access to vehicle intelligence and personalized assistance.
SoundHound AI partnered with Perplexity to enhance SoundHound Chat AI through the integration of the latter’s online Large Language Model capabilities for advanced, real-time voice assistant responses.
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 is a Risky Bet for Investors
SOUN’s innovative portfolio makes it well-positioned to benefit from the strong TAM of global automotive and restaurant markets.
However, SoundHound AI currently has a Growth Score of D, which means it is a risky bet for growth-oriented investors. Stretched valuation makes the stock unattractive at this moment.
Image: Bigstock
SOUN Gains 135.9% Year to Date: Is it too Late to Buy the Stock?
SoundHound AI (SOUN - Free Report) shares have jumped 135.9% year to date (YTD), outperforming the Zacks Computer & Technology sector’s gain of 21.3% and the Zacks Computers – IT Services industry’s return of 3%.
It 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 17.2%, 22.1% and 62.5%, respectively.
SoundHound AI shares have been benefiting from a strong portfolio, a solid partner base and an expanding clientele. SOUN offers conversational intelligence through independent Voice AI solutions in 25 languages in both cloud-enabled and hardware-embedded devices.
Its 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 powered devices.
However, SOUN’s unimpressive second-quarter 2024 results bring this question into investors’ minds - is it too late to jump into SoundHound AI’s bull run?
Let’s dig deep to find out.
SOUN Stock Beats Sector YTD
Image Source: Zacks Investment Research
SoundHound AI’s Q2 Earnings Miss Estimates, Revenues Meet
SoundHound AI reported a loss of 11 cents per share, wider than the Zacks Consensus Estimate of a loss of 9 cents. It reported revenues of $13 million, in line with the consensus mark, but up 54% year over year.
SoundHound AI had $723 million in cumulative subscriptions and bookings backlog at the end of the second quarter of 2024, which doubled year over year. The annual run rate jumped 90% year over year to more than 5 billion queries.
SOUN’s liquidity position was strong, with a cash balance of $201 million at the end of the second quarter. It prepaid $100 million in debt, which saves more than $55 million in interest and fees.
It now expects revenues to be $80 million and $150 million for 2024 and 2025, respectively, including the contribution from the recently announced acquisition of Amelia.
The Zacks Consensus Estimate for SOUN’s 2024 revenues is pegged at $82.59 million, indicating year-over-year growth of 80.05%. The consensus mark for 2024 loss is pegged at 36 cents per share, which has widened by four cents over the past 30 days.
The Zacks Consensus Estimate for SOUN’s 2025 revenues is pegged at $151.87 million, indicating year-over-year growth of 83.87%. The consensus mark for 2025 loss is pegged at 21 cents per share, unchanged over the past 30 days.
SoundHound AI, Inc. Price and Consensus
SoundHound AI, Inc. price-consensus-chart | SoundHound AI, Inc. Quote
SOUN Shares Overvalued
SOUN stock is not so cheap, as the Value 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 14.02X, higher than the Zacks Computer & Technology sector’s 6.35X.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
SOUN Stock to Benefit From Expanding Footprint
SoundHound AI’s prospects benefit from its expanding footprint in industries like automotive and restaurants, driven by its innovative portfolio. It has more than 270 patents currently, with over 155 granted and more than 115 pending.
The strong demand for SoundHound Chat AI and AI Customer Service solutions is noteworthy. Generative AI (GenAI) presents a significant growth opportunity for SoundHound AI’s prospects. Enterprise spending on GenAI is projected to grow 15-fold over the next three years to nearly $250 billion.
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.
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. SoundHound AI launched an advanced in-vehicle voice assistant leveraging NVIDIA DRIVE, enabling real-time and generative AI capabilities for seamless, offline access to vehicle intelligence and personalized assistance.
SoundHound AI partnered with Perplexity to enhance SoundHound Chat AI through the integration of the latter’s online Large Language Model capabilities for advanced, real-time voice assistant responses.
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 is a Risky Bet for Investors
SOUN’s innovative portfolio makes it well-positioned to benefit from the strong TAM of global automotive and restaurant markets.
However, SoundHound AI currently has a Growth Score of D, which means it is a risky bet for growth-oriented investors. Stretched valuation makes the stock unattractive at this moment.
SOUN currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.