TLDR
- SoundHound AI (SOUN) stock rose 6.6% Friday, closing at $11.75 on volume 38% above average
- Oppenheimer kept Perform rating after CES demos, citing valuation concerns despite strong technology
- Q3 revenue hit $42.05M, up 67.6% YoY, but company posts -211% net margin
- Insiders sold 493K shares in 90 days while Vanguard lifted stake to 43.5M shares
- Analysts rate stock “Moderate Buy” with $16.07 average target, forecasting 98% sales growth
SoundHound AI stock jumped 6.6% Friday, reaching $11.75 after touching $12.31 intraday. Volume hit 39.1 million shares, up 38% from the 28.4 million daily average.
Oppenheimer maintained its Perform rating following analyst meetings and product demos at CES. Analyst Brian Schwartz highlighted new agentic capabilities and platform differentiation shown at the event.
The firm called SoundHound a “well run business” strategically positioned for voice AI monetization. Oppenheimer praised the company’s execution of strategic mergers and acquisitions.
Schwartz noted SoundHound could become one of the fastest-growing software companies by 2026. The company has posted a five-year revenue CAGR of 62%.
Revenue Beats Expectations But Losses Continue
SoundHound reported Q3 revenue of $42.05 million, topping analyst estimates of $40.48 million. The 67.6% year-over-year increase shows continued market expansion.
Earnings per share came in at -$0.03, beating consensus estimates of -$0.09. The company remains unprofitable with a negative net margin of 211%.
Revenue growth over the last twelve months reached 120.5%. Analysts forecast 98% sales growth for the current fiscal year.
The company maintains a current ratio of 5.15 and holds more cash than debt. The stock trades at $11.06, above its calculated fair value.
Analyst Ratings and Insider Activity
Consensus rating stands at “Moderate Buy” with an average price target of $16.07. Two analysts rate the stock Strong Buy, five say Buy, two Hold, and one Sell.
Piper Sandler cut its price target from $15.00 to $11.00 while keeping a neutral rating. The average target suggests upside potential from current levels.
Insiders sold 492,965 shares over 90 days. CFO Nitesh Sharan sold 60,780 shares at $11.28 in December, a 3.44% position decrease.
SVP Majid Emami sold 32,741 shares at $10.66, reducing his stake by 5.79%. Company insiders now own 9.17% of outstanding shares.
Institutional ownership sits at 19.3%. Vanguard Group boosted its holdings 16.4% in Q3, now owning 43.5 million shares worth $699 million.
Geode Capital and State Street both increased positions in recent quarters. MIRAE ASSET GLOBAL ETFS raised its stake 13.4% in Q3.
Oppenheimer cited current valuation and “risks to the durability of profitable growth” for its Perform rating. The stock trades at a price-to-book multiple of 11.64.
The 50-day moving average sits at $12.04 while the 200-day stands at $13.48. Market cap reaches $4.94 billion with a beta of 2.65.
Analysts don’t expect profitability this year, forecasting -0.38 EPS for the current year.
