Wall Street Zen Downgrades SoundHound AI (NASDAQ:SOUN) to Strong Sell

SoundHound AI (NASDAQ:SOUN) was downgraded by analysts at Wall Street Zen from a “sell” rating to a “strong sell” rating in a report issued on Saturday, Wall Street Zen reports.

Several other brokerages have also issued reports on SOUN. DA Davidson decreased their price target on shares of SoundHound AI from $12.00 to $10.00 and set a “buy” rating for the company in a research note on Thursday, August 6th. Piper Sandler dropped their price objective on shares of SoundHound AI from $8.00 to $7.00 and set a “neutral” rating on the stock in a research note on Thursday, August 6th. Finally, Weiss Ratings restated a “sell (e+)” rating on shares of SoundHound AI in a report on Monday, June 15th. One research analyst has rated the stock with a Strong Buy rating, four have issued a Buy rating, three have assigned a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat.com, SoundHound AI currently has an average rating of “Moderate Buy” and an average price target of $13.60.

SoundHound AI Price Performance

Shares of SOUN stock opened at $6.74 on Friday. The business’s fifty day moving average is $6.75 and its 200 day moving average is $7.33. The stock has a market cap of $2.99 billion, a price-to-earnings ratio of -17.74 and a beta of 2.66. SoundHound AI has a twelve month low of $5.65 and a twelve month high of $22.17.

SoundHound AI (NASDAQ:SOUN) last announced its quarterly earnings data on Wednesday, August 5th. The company reported ($0.02) EPS for the quarter, beating the consensus estimate of ($0.13) by $0.11. SoundHound AI had a negative return on equity of 30.22% and a negative net margin of 67.45%.The business had revenue of $61.90 million during the quarter, compared to analyst estimates of $52.38 million. During the same quarter last year, the firm posted ($0.19) earnings per share. The company’s revenue for the quarter was up 45.0% on a year-over-year basis. Equities research analysts expect that SoundHound AI will post -0.33 earnings per share for the current fiscal year.

Insider Transactions at SoundHound AI

In other news, CTO Timothy Stonehocker sold 18,802 shares of SoundHound AI stock in a transaction dated Monday, June 15th. The stock was sold at an average price of $7.46, for a total value of $140,262.92. Following the completion of the transaction, the chief technology officer owned 502,290 shares of the company’s stock, valued at $3,747,083.40. The trade was a 3.61% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, SVP Majid Emami sold 28,843 shares of the company’s stock in a transaction dated Monday, June 15th. The stock was sold at an average price of $7.46, for a total transaction of $215,168.78. Following the completion of the transaction, the senior vice president owned 472,983 shares in the company, valued at approximately $3,528,453.18. The trade was a 5.75% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last 90 days, insiders sold 269,365 shares of company stock valued at $2,009,047. 8.84% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently made changes to their positions in the company. Morgan Stanley boosted its stake in SoundHound AI by 48.1% during the 4th quarter. Morgan Stanley now owns 8,987,522 shares of the company’s stock valued at $89,606,000 after purchasing an additional 2,917,280 shares during the last quarter. California State Teachers Retirement System raised its stake in shares of SoundHound AI by 558.0% in the second quarter. California State Teachers Retirement System now owns 2,895,228 shares of the company’s stock worth $18,732,000 after purchasing an additional 2,455,205 shares during the last quarter. Voloridge Investment Management LLC raised its stake in shares of SoundHound AI by 2,259.7% in the fourth quarter. Voloridge Investment Management LLC now owns 2,199,511 shares of the company’s stock worth $21,929,000 after purchasing an additional 2,106,298 shares during the last quarter. Jump Financial LLC bought a new position in shares of SoundHound AI during the third quarter valued at $21,679,000. Finally, HRT Financial LP bought a new position in shares of SoundHound AI during the second quarter valued at $11,914,000. Institutional investors own 19.28% of the company’s stock.

Key Stories Impacting SoundHound AI

Here are the key news stories impacting SoundHound AI this week:

• Positive Sentiment: LivePerson acquisition completed: SoundHound officially closed its acquisition of LivePerson, removing a major transaction uncertainty and combining SoundHound’s voice-AI technology with LivePerson’s customer-engagement and omnichannel capabilities. The enlarged platform is expected to broaden SoundHound’s customer base and revenue opportunities. SoundHound AI Completes Acquisition of LivePerson
• Positive Sentiment: New CFO appointed: John Collins will serve as CFO of the combined company, providing dedicated financial leadership as SoundHound integrates LivePerson and pursues its expansion strategy. SoundHound AI Completes Acquisition of LivePerson
• Positive Sentiment: Growth potential remains substantial: Prior coverage highlighted management’s projection for combined revenue of approximately $350 million to $400 million next year if the LivePerson deal closes. The acquisition could accelerate SoundHound’s scale across voice, customer-service and AI-agent applications. Where Will SoundHound AI Stock Be in 1 Year?
• Neutral Sentiment: Shareholder approval cleared the final major hurdle: LivePerson investors approved the transaction, allowing the companies to proceed to closing. The completed deal now shifts attention from regulatory and voting risk to integration, execution and the financial impact of the combination. SoundHound AI Wins Stockholder Approval
• Negative Sentiment: Valuation remains a concern: Despite a roughly 188% three-year gain, recent analysis continues to characterize SOUN as expensive on market multiples. Investors may demand evidence that the LivePerson acquisition can produce profitable growth before assigning the shares a higher valuation. Is SoundHound AI Getting Too Rich?
• Negative Sentiment: Profitability and post-earnings pressure persist: SoundHound’s latest quarter beat EPS and revenue expectations, with revenue up 45% year over year, but the company remains unprofitable. The stock has weakened since earnings as investors focus on future estimates, execution risk and the path to sustainable profits. Why Is SoundHound AI Down Since Its Last Earnings Report?
• Positive Sentiment: High short interest could amplify volatility: Nearly 40% short interest creates potential for a short squeeze if the acquisition produces strong operating results, although it also signals considerable skepticism among investors. SoundHound Stock and Short Interest

SoundHound AI Company Profile

SoundHound AI, Inc is a voice AI and conversational intelligence company specializing in speech recognition, natural language understanding and sound identification technologies. Founded in 2005 and headquartered in Santa Clara, California, the company initially gained recognition with its music discovery app before pivoting to enterprise-grade voice AI solutions. Over the years, SoundHound AI has built a comprehensive platform that enables developers and businesses to embed conversational intelligence into a wide range of products and services.

The company’s core offering is the Houndify voice AI platform, which provides customizable speech-to-meaning technology, domain-specific natural language understanding and text-to-speech capabilities.