SoundHound AI, Inc. (NASDAQ:SOUN) made headlines with an impressive 12.3% surge in its stock price during Friday’s trading session. The company’s stock climbed to an intraday high of $10.00 before closing at $10.01, marking a strong recovery from its previous close of $8.91. Despite this bullish price action, trading volume for the day stood at 16,885,682 shares, significantly lower than the average daily volume of 41,148,432 shares—a 59% decline.
Analyst Ratings: Bullish Outlook on SOUN
Several equities analysts have recently issued favorable ratings on SoundHound AI’s stock. DA Davidson raised its price target from $9.50 to $13.00, maintaining a “buy” rating, while Wedbush provided the most optimistic outlook, increasing its target from $10.00 to $22.00 with an “outperform” rating. HC Wainwright reaffirmed a bullish stance by reiterating a “buy” rating and setting an ambitious price target of $26.00. However, not all analysts are entirely bullish, as Northland Securities maintained a “market perform” rating with a price target of $8.00, and Cantor Fitzgerald upgraded the stock to “hold.”
With mixed analyst ratings, the consensus price target for SoundHound AI stands at $12.86, according to MarketBeat data.
Stock Performance and Financial Indicators
The company’s stock is currently trading near its 200-day moving average of $10.15 but remains below its 50-day moving average of $13.05. SoundHound AI holds a market capitalization of $4.00 billion, with a price-to-earnings (P/E) ratio of -28.15, highlighting its unprofitable status. Additionally, the company maintains a debt-to-equity ratio of 0.13, indicating a manageable level of debt.
Earnings and Revenue Insights
SoundHound AI recently reported its quarterly earnings on February 27th. The company posted a loss of $0.69 per share, significantly missing analysts’ expectations of a $0.11 loss per share. The revenue for the quarter stood at $34.54 million, slightly surpassing consensus estimates of $33.70 million. Despite revenue growth, SoundHound AI reported a negative net margin of 163.58% and a return on equity of -55.58%. Analysts predict that the company will post an annual earnings per share (EPS) loss of -$0.38 for the current year.
Insider Trading Activity
Corporate insiders have been actively trading SoundHound AI shares, with significant sales recorded over the past three months. James Ming Hom, an insider, sold 58,382 shares at an average price of $18.35, amounting to a transaction worth $1.07 million. Similarly, Director Lawrence Marcus offloaded 20,000 shares at $20.47 per share, totaling $409,400. In the past three months, insiders have sold approximately 999,777 shares, generating $20.06 million in total.
Institutional Interest on the Rise
Institutional investors have been adjusting their positions in SoundHound AI, signaling confidence in the company’s long-term potential. Notable increases in holdings include:
- Farther Finance Advisors LLC raised its stake by 298.5% in Q3, now holding 8,966 shares.
- Sigma Planning Corp increased its position by 79.7% to 21,640 shares.
- Wolverine Asset Management LLC boosted its stake by 7.7% to 35,102 shares.
- Victory Capital Management Inc. made the largest increase, expanding its holdings by 230.9% to 120,812 shares.
Institutional investors and hedge funds currently own approximately 19.28% of SoundHound AI’s stock.
Final Thoughts
SoundHound AI’s recent stock surge, coupled with strong institutional support and bullish analyst ratings, reflects growing investor confidence. However, with continued insider selling and a history of earnings misses, the stock remains a volatile play. Investors should closely monitor upcoming earnings reports and market trends to gauge future performance.
