SoundHound AI is a voice AI technology company. Founded in 2005, it is known for its voice recognition and music identification technology.
Its flagship products include Houndify, a voice AI platform that allows developers to integrate voice recognition and understanding into their applications, and SoundHound, a popular app for music recognition.
SoundHound AI’s technology is designed to understand and respond to complex voice queries, providing solutions for industries such as automotive, hospitality, and customer service. The company operates globally, with offices in North America, Europe, and Asia. Keyvan Mohajer, a co-founder, is the current CEO.
The company trades on the Nasdaq stock exchange under the ticker symbol SOUN.
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SoundHound AI EPS and Revenue Breakdown 2020-2023
| SOUN | Annual Loss Per Share | Annual Revenue |
|---|---|---|
| 2020 | $-1.11 | $13.0 million |
| 2021 | $-1.18 | $21.2 million |
| 2022 | $-0.74 | $31.1 million |
| 2023 | $-0.40 | $45.8 million |
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SOUN Share Price & Chart
SoundHound AI went public in April 2022 via a special purpose acquisition company (SPAC) merger. The stock began trading on the Nasdaq under ticker SOUN at $8.72 per share on its first day but is now (as of June 2024) trading around the $5 per share mark. However, it has broken higher, above the $8 mark, before falling on a couple of occasions.
P/B Ratio: 10.06 (Source: FullRatio)
Average Analyst Consensus 12-Month Price Target: $7.17
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SoundHound Stock Forecast
Data compiled by TradingView shows that out of six analysts covering SoundHound AI, four have a Buy rating on the stock, and two have a Hold rating on the company’s shares.
A View From The Bulls:
The SoundHound price target was raised to $9.50 from $7.50 at DA Davidson in March, with the firm keeping a Buy rating on the stock after meeting with CEO Keyvan Mohajer.
DA Davidson analysts said the discussion left it with greater clarity on the competitive moat of SoundHound’s technology and the magnitude of the AI customer service opportunity.
A View From The Bears:
There is no shortage of bears when it comes to SoundHound AI.
In March, Cantor Fitzgerald double-downgraded SoundHound to Underweight from Overweight, lowering the target to $4.90, down from $5.80. They believe SOUN’s current valuation is “difficult to justify” given the company’s infancy.
Meanwhile, SoundHound was the target of a March short report from Capybara Research. The short-selling firm said the company is “worth little in its current form,” claiming that it has a “broken business model and no clear path to profitability.”
The firm also accused SoundHound AI management of deceiving investors about their technology, partnerships, revenue, and growth.
Our View: For investors focused on AI stocks, SoundHound AI may sound like an attractive option, but there are clear headwinds that need to be thoroughly researched first before taking any further steps.
Who Might Buy SoundHound Shares
SoundHound AI is a high-growth, high-risk opportunity. Here’s a breakdown of investor profiles that might find the company’s shares attractive:
SoundHound AI is a relatively young company with a developing technology. This translates to high potential growth, but there are also significant risks. Investors comfortable with substantial volatility and those with a high risk tolerance and a long-term investment horizon may be better suited to buying SoundHound AI shares.
Investors Bullish on Voice AI: SoundHound is a leader in a rapidly growing field. If you believe voice interfaces are the future of human-computer interaction, then SoundHound AI could be a good way to gain exposure to this trend.
While established tech giants like Google and Amazon are also developing voice AI, SoundHound offers a more specialised play on this specific technology. If you’re already invested in broader AI themes, SoundHound could add some AI diversification to your portfolio.
SoundHound AI is still unprofitable and generates a low level of revenue ($45.87m in 2023). Investors should be comfortable with a company in this stage of development.
