SoundHound AI Stock Drops 2.9% as Analysts Assess Future Potential

Shares of SoundHound AI, Inc. (NASDAQ:SOUN) experienced a decline of 2.9% during trading on Thursday, falling to a low of $11.25 before closing at $11.29. The trading session saw a total of 52,458,454 shares exchanged, marking a significant 15% increase from the average volume of 45,572,676 shares. The stock had previously closed at $11.63.

Analysts Offer Mixed Ratings

The recent performance of SoundHound AI has attracted attention from several Wall Street analysts. On August 8, 2023, Northland Capital Markets upgraded the stock from a “hold” rating to a “strong-buy” rating. Meanwhile, Oppenheimer initiated coverage on September 11, 2023, assigning a “market perform” rating. Additionally, Wedbush maintained an “outperform” rating and set a price target of $16.00 for the shares on the same day.

Northland Securities also revised its rating for SoundHound AI from “market perform” to “outperform,” establishing a target price of $14.50. More recently, HC Wainwright raised its price objective from $18.00 to $26.00 and classified the stock as a “buy.” Overall, the consensus among analysts indicates one “strong buy,” five “buy,” three “hold,” and one “sell” rating for SoundHound AI, according to data from MarketBeat.

Currently, the consensus rating for SoundHound AI stands at “Moderate Buy,” with a target price averaging around $17.42.

Latest Earnings and Insider Transactions

SoundHound AI announced its quarterly earnings on November 6, 2023, revealing earnings per share of ($0.03), surpassing analysts’ expectations of ($0.09) by $0.06. The company reported revenue of $42.05 million for the quarter, exceeding the consensus estimate of $40.48 million. This represents a year-over-year revenue increase of 67.6%. In comparison, the same quarter last year saw earnings per share of ($0.04).

For fiscal year 2025, SoundHound AI has provided guidance indicating a projected EPS of -$0.38, as anticipated by sell-side analysts.

In addition to financial results, insider transactions have raised eyebrows. On October 8, 2023, Vice President Majid Emami sold 41,167 shares at an average price of $20.00, totaling $823,340. Following this sale, Emami’s holdings decreased by 6.34% to 608,186 shares, valued at approximately $12,163,720. Similarly, CEO Keyvan Mohajer sold 118,654 shares on the same day for a total of $2,373,080, which also represented a 4.82% decrease in his position.

In total, insiders have sold 787,260 shares amounting to $13,973,056 in the last ninety days, with corporate insiders now holding 9.17% of the company’s stock.

Institutional Investment Activity

Recent activities among institutional investors reflect varying strategies towards SoundHound AI. Northwestern Mutual Wealth Management Co. boosted its stake by 83.1% in the second quarter, acquiring a total of 2,336 shares worth $25,000 after purchasing an additional 1,060 shares. Danske Bank A S entered a new position in SoundHound AI during the third quarter, valued at approximately $26,000.

Advisors Asset Management Inc. increased its stake by 68.4% during the second quarter, now owning 2,519 shares valued at $27,000 after acquiring an additional 1,023 shares. Additionally, Investors Research Corp lifted its holdings by 62.4% in the third quarter, now owning 1,822 shares valued at $29,000. Hedge funds and institutional investors collectively own 19.28% of SoundHound AI’s stock.

SoundHound AI, headquartered in Santa Clara, California, develops advanced voice artificial intelligence solutions. Its offerings cater to various industries, including automotive, television, and customer service, aiming to enhance conversational experiences through products such as the Houndify platform and SoundHound Chat AI.

As the market continues to respond to these developments, stakeholders will be observing how SoundHound AI’s strategies and performance evolve in the coming months.