SoundHound AI Inc (SOUN) shares dropped 4.6% during trading on Monday, reaching a low of $4.17 before closing at $4.18. The stock experienced a decline in trading volume, with approximately 9,470,367 shares traded, a decrease of 83% from the average daily volume. SoundHound AI has been the subject of several analyst reports. HC Wainwright upped their price target on shares of SoundHound AI from $5.00 to $7.00 and gave the company a 'buy' rating. DA Davidson also raised their price target on shares of SoundHound AI from $7.50 to $9.50 and gave the company a 'buy' rating. Wedbush lifted their target price on shares of SoundHound AI from $5.00 to $9.00 and gave the stock an 'outperform' rating. LADENBURG THALM/SH SH assumed coverage on shares of SoundHound AI and set a 'buy' rating and a $4.00 target price for the company. Northland Securities reaffirmed a 'market perform' rating on shares of SoundHound AI. The consensus rating for SoundHound AI is 'Moderate Buy' with an average price target of $6.88.
Shares of SoundHound AI stumbled in the midweek session, declining 11% in the past five sessions. The stock trades at 19.73x trailing-year revenue, while the sales multiple for the software industry sits at only 2.22x. Despite the recent decline, SoundHound AI has seen a positive performance, with a year-to-date increase of over 90%. However, the stock is considered overpriced compared to other AI-related enterprises. SoundHound AI offers voice AI and speech recognition software, operating in the global generative AI market, which is projected to become a $1.3 trillion ecosystem by 2032. The global speech and voice recognition market size reached $12.62 billion last year.
SoundHound AI's strong Q1 results show rising demand in automotive and restaurant sectors. The company continues to see demand for its voice AI products picked up in the automotive and restaurant industries, signing various large brand deals that fuel growth while grabbing market share in the conversational AI market. SoundHound fully closed its acquisition of SYNQ3 Restaurant Solutions, making it the largest U.S. provider of voice AI for restaurants. The company's subscription and bookings backlog increased to $682.0 million in the first quarter. SoundHound expects to see positive adjusted EBITDA in 2025. The analyst raised FY24 revenue outlook to $71.6 million.
Chief Technology Officer Timothy Stonehocker of SoundHound AI Inc (NASDAQ: SOUN) sold 104,000 shares of the company on June 5, 2024, according to a recent SEC filing. Following this transaction, the insider now owns 883,570 shares of the company. Over the past year, Timothy Stonehocker has sold a total of 382,476 shares and has not made any purchases of the company's stock. This recent transaction is part of a broader trend observed at SoundHound AI Inc, where there have been 46 insider sells and no insider buys over the past year. Shares of SoundHound AI Inc were trading at $5 on the day of the transaction, giving the company a market cap of approximately $1.53 billion.
In light of the recent trading stumbles and the overpriced valuation, investors may consider put options to profit from the downside momentum. The 17 May 2024 $3.50 put is an attractive idea, with a premium of 39 cents. The contract has decent engagement metrics, with open interest of 470 contracts. The expiration date of May 17 will likely follow SoundHound AI's first-quarter earnings report.
SoundHound AI has acquired Allset, an online food ordering platform that connects restaurants and local customers. The financial terms of the deal were undisclosed. Allset works with nearly 7,000 restaurant partners nationwide. SoundHound, a voice AI and speech recognition company, went public in 2022 and generated $45.9 million in revenue in 2023. As part of Nvidia's investment strategy, the chip maker has invested $3.7 million into SoundHound. SoundHound's Vehicle Intelligence product, powered by Nvidia Drive, allows drivers to ask questions related to maintenance and safety using natural speech. The acquisition of Allset will advance SoundHound's plans to enable voice-enabled food and drink ordering across millions of cars, TVs, and smart devices. SoundHound's voice ordering technology works across multiple channels, including phone, drive-thru, kiosk, and mobile app. Over 10,000 restaurant locations use SoundHound's platform for speech recognition, menu understanding, order processing, and customer FAQs. The acquisition will help SoundHound bring voice AI solutions to more restaurants looking to improve operational efficiency.
SoundHound AI has repaid all of its debt, saving $55 million in interest and charges. The company now has a net cash balance of $180 million. CFO Nitesh Sharan believes the debt-free balance sheet and cash position will allow the company to capture increasing customer demand for its voice AI solutions. SoundHound AI stock has seen a sharp pullback, down 48% from its 52-week highs. However, the company's recent growth justifies its expensive valuation, with revenue expected to increase by 55% at the midpoint of its guidance range for 2024. SoundHound has a cumulative subscriptions and bookings backlog worth $682 million. Analysts have an outperform rating on the stock with a price target of $9, pointing toward potential gains of 93%.
SoundHound AI's short percent of float has risen 4.18% since its last report. The company recently reported that it has 70.26 million shares sold short, which is 23.91% of all regular shares that are available for trading. Based on its trading volume, it would take traders 3.29 days to cover their short positions on average. Short interest is the number of shares that have been sold short but have not yet been covered or closed out. Short selling is when a trader sells shares of a company they do not own, with the hope that the price will fall. Short interest is important to track because it can act as an indicator of market sentiment towards a particular stock. An increase in short interest can signal that investors have become more bearish, while a decrease in short interest can signal they have become more bullish. SoundHound AI's peer group average for short interest as a percentage of float is 7.27%, which means the company has higher short interest than most of its peers.
SoundHound AI (NASDAQ: SOUN) stock has nearly doubled in the past six months. The company specializes in AI voice technology, which has a wide range of applications including interacting with cars, discovering music, and handling online and drive-thru orders for restaurants. The AI voice market is expected to grow by around 26% annually over the next decade, reaching $15 billion by 2032. SoundHound has a suite of protective patents and a growing customer list, making it well-positioned for future market growth. The stock price has fluctuated, but its current valuation of $1.3 billion is considered reasonable. There is potential for the company to be acquired, as major tech companies have shown interest in AI voice technology. The stock is priced at 19.5 times revenue, reflecting the company's strong sales growth of around 50% per year. The Motley Fool Stock Advisor analyst team did not include SoundHound AI in their list of recommended stocks, but aggressive investors looking for high upside potential may consider adding it to their portfolio. [099ea65a]
SoundHound AI, a lesser-known artificial intelligence (AI) investment, has the potential to outperform Nvidia. SoundHound AI stock is currently below $5 but could reach $10 in the future. CEO Keyvan Mohajer sold 184,498 shares of SoundHound AI stock on June 24, and CTO Timothy Stonehocker sold 104,000 shares on June 5. However, even after these sales, Mohajer still owns 953,333 shares and Stonehocker holds 883,570 shares. SoundHound AI has reached an agreement with its lenders to prepay its $100 million debt in full, which will leave the company with a cash balance of around $180 million and no outstanding debt. SoundHound AI recently acquired Allset, a food ordering platform, as part of its plan to develop a voice commerce ecosystem. The acquisition will allow consumers to use conversational voice AI to order food from their vehicles or voice-enabled devices. Despite the insider selling, SoundHound AI's financial health and the Allset acquisition make it an attractive investment with the potential to change the way customers communicate with restaurants.