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Year to date, the stock has gained a massive 117.9%, outperforming 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 21.1%, 23.1% and 55.1%, respectively.
SoundHound AI has 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.
However, despite a strong AI-powered portfolio, SOUN’s modest near-term earnings prospects have been negatively impacting share price movement.
So, are these modest near-term prospects a bother for investors, or does SOUN’s strong AI-driven portfolio offer further growth opportunities?
One Month Performance
Image Source: Zacks Investment Research
Let’s dig deep to find out.
SOUN’s Earnings Estimates Trending Downward
SoundHound AI 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 a penny over the past 30 days.
For 2025, the consensus mark for revenues is pegged at $151.87 million, suggesting year-over-year growth of 83.87%. The Zacks Consensus Estimate for 2025 loss is pegged at 21 cents per share, which has widened by a couple of cents over the past 30 days.
SOUN’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 powered devices.
SoundHound AI’s prospects benefit from its expanding footprint in industries like automotive and restaurants, driven by its innovative portfolio. It currently has more than 270 patents, 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.
It recently announced that the SoundHound Chat AI voice assistant has launched a new customization tool to help transform how automotive brands interact with their customers within the vehicle.
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 Perplexity’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 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 12.69X, higher than the Zacks Computer & Technology sector’s 5.87X.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
SOUN is a Risky Bet for Investors
SOUN’s innovative AI-powered portfolio makes it well-positioned to benefit from the strong TAM of global automotive and restaurant markets. This bodes well for long-term investors.
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 Declines 10.5% in a Month: Can AI Push Help the Stock Rebound?
SoundHound AI (SOUN - Free Report) shares have declined 10.5% in the past month, underperforming the Zacks Computer & Technology sector’s fall of 1.3% and the Zacks Computers – IT Services industry’s return of 6.3%.
Year to date, the stock has gained a massive 117.9%, outperforming 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 21.1%, 23.1% and 55.1%, respectively.
SoundHound AI has 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.
However, despite a strong AI-powered portfolio, SOUN’s modest near-term earnings prospects have been negatively impacting share price movement.
So, are these modest near-term prospects a bother for investors, or does SOUN’s strong AI-driven portfolio offer further growth opportunities?
One Month Performance
Image Source: Zacks Investment Research
Let’s dig deep to find out.
SOUN’s Earnings Estimates Trending Downward
SoundHound AI 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 a penny over the past 30 days.
For 2025, the consensus mark for revenues is pegged at $151.87 million, suggesting year-over-year growth of 83.87%. The Zacks Consensus Estimate for 2025 loss is pegged at 21 cents per share, which has widened by a couple of cents over the past 30 days.
SoundHound AI, Inc. Price and Consensus
SoundHound AI, Inc. price-consensus-chart | SoundHound AI, Inc. Quote
SOUN Stock Benefits From AI-Backed Portfolio
SOUN’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 powered devices.
SoundHound AI’s prospects benefit from its expanding footprint in industries like automotive and restaurants, driven by its innovative portfolio. It currently has more than 270 patents, 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.
It recently announced that the SoundHound Chat AI voice assistant has launched a new customization tool to help transform how automotive brands interact with their customers within the vehicle.
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 Perplexity’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 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 12.69X, higher than the Zacks Computer & Technology sector’s 5.87X.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
SOUN is a Risky Bet for Investors
SOUN’s innovative AI-powered portfolio makes it well-positioned to benefit from the strong TAM of global automotive and restaurant markets. This bodes well for long-term investors.
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.