SoundHound AI Shares Fall 2.9% Amid Analyst Ratings and Transactions

SoundHound AI, Inc. (NASDAQ:SOUN) experienced a decline of 2.9% in its stock price during trading on Thursday, reaching a low of $11.25 before closing at $11.29. The trading session saw a volume of 52,458,454 shares, marking a 15% increase compared to the average volume of 45,572,676 shares. This recent dip follows a previous closing price of $11.63.

Market Reactions and Analyst Ratings

Analysts have recently scrutinized SoundHound AI, providing mixed ratings amid fluctuating stock performance. Notably, on August 8, 2023, Northland Capital Markets upgraded the stock from a “hold” to a “strong buy.” Following this, Oppenheimer initiated coverage with a “market perform” rating on September 11, 2023. The same day, Wedbush reaffirmed an “outperform” rating and set a price target of $16.00. In a further update, Northland Securities also raised its rating to “outperform” with a price target of $14.50.

Additionally, on October 16, 2023, HC Wainwright increased its price target for SoundHound AI from $18.00 to $26.00 while maintaining a “buy” rating. Currently, the stock holds a consensus rating of “Moderate Buy” with a target price of $17.42, according to MarketBeat data. Of particular note, one analyst has assigned a “Strong Buy” rating, while five have rated it as a Buy, three have given a Hold rating, and one has issued a Sell rating.

Financial Performance and Insider Transactions

SoundHound AI reported its quarterly earnings on November 6, 2023, revealing earnings per share (EPS) of ($0.03), which exceeded analysts’ expectations of ($0.09) by $0.06. The company generated revenues of $42.05 million for the quarter, surpassing estimates of $40.48 million. Although the company reported a negative net margin of 211.16% and a negative return on equity of 93.64%, it marked a significant year-over-year revenue increase of 67.6%. This compares to an EPS of ($0.04) in the same quarter last year. Looking ahead, analysts predict that SoundHound AI will post an EPS of -0.38 for the current fiscal year.

In terms of insider activity, Vice President Majid Emami sold 41,167 shares on October 8, 2023, at an average price of $20.00, totaling approximately $823,340. After this transaction, Emami holds 608,186 shares valued at around $12.16 million, reflecting a 6.34% decrease in his position. CEO Keyvan Mohajer also sold 118,654 shares for approximately $2.37 million on the same day, leaving him with 2,342,613 shares worth about $46.85 million, a reduction of 4.82%. Over the past ninety days, corporate insiders have sold 787,260 shares valued at $13.97 million, with insiders currently owning 9.17% of the company’s stock.

Institutional investors have been adjusting their holdings as well. Northwestern Mutual Wealth Management Co. increased its position in SoundHound AI by 83.1% during the second quarter, now owning 2,336 shares valued at $25,000. Danske Bank A S acquired a new position valued at approximately $26,000 in the third quarter. Advisors Asset Management Inc. boosted its stake by 68.4% in the second quarter and now holds 2,519 shares worth $27,000. Additionally, Investors Research Corp increased its holdings by 62.4% during the third quarter, owning 1,822 shares valued at $29,000. Hedge funds and institutional investors collectively own 19.28% of the company’s stock.

SoundHound AI, Inc. specializes in developing independent voice artificial intelligence (AI) solutions that enable businesses across various sectors, including automotive, television, and customer service, to deliver high-quality conversational experiences. Its offerings include the Houndify platform, which provides tools for building conversational voice assistants, and SoundHound Smart Answering, which offers custom AI-powered voice solutions.

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