SoundHound AI (NASDAQ:SOUN) Trading Down 7.8% After Earnings Miss

SoundHound AI, Inc. (NASDAQ:SOUN)’s share price fell 7.8% during mid-day trading on Friday after the company announced weaker than expected quarterly earnings. The stock traded as low as $8.35 and last traded at $8.88. 48,716,274 shares were traded during mid-day trading, an increase of 75% from the average session volume of 27,883,531 shares. The stock had previously closed at $9.63.

The company reported ($0.06) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.05) by ($0.01). SoundHound AI had a negative net margin of 91.84% and a negative return on equity of 41.46%. The firm had revenue of $44.20 million for the quarter, compared to the consensus estimate of $42.56 million. During the same period in the prior year, the business earned ($0.06) earnings per share. The company’s revenue for the quarter was up 51.7% on a year-over-year basis.

SoundHound AI News Summary

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

• Positive Sentiment: SoundHound posted record Q1 revenue of $44.2 million, up about 52% year over year, and exceeded revenue expectations, showing continued momentum in its voice AI business. SoundHound AI Reports Record Q1 Revenue of $44.2 Million, Up 52%
• Positive Sentiment: The company launched OASYS, a self-learning AI agent platform, which could expand SoundHound’s product offering and support longer-term growth. SoundHound AI (SOUN) Launches OASYS Self-Learning AI Agent Platform
• Positive Sentiment: SoundHound outlined 2027 revenue expectations of at least $350 million to $400 million after the planned LivePerson acquisition, suggesting management sees meaningful future scale. SoundHound outlines 2027 revenue of at minimum $350M-$400M following planned LivePerson acquisition
• Neutral Sentiment: Analysts remain broadly constructive, with at least one recent upgrade to strong-buy and commentary that the stock could have meaningful upside if execution improves. Wall Street Bulls Look Optimistic About SoundHound AI (SOUN): Should You Buy?
• Negative Sentiment: Despite the revenue beat, SoundHound missed earnings estimates and cited higher acquisition-related costs and vendor true-ups, which pressured margins and weighed on investor sentiment. SOUN Q1 Earnings Miss on Higher Costs, Revenue Beat, Stock Down
• Negative Sentiment: Investors also appear concerned that the planned LivePerson deal and broader acquisition strategy could continue to pressure earnings even as revenue grows. SoundHound’s stock falls as acquisitions weigh on earnings results

Analysts Set New Price Targets

Several equities research analysts have recently commented on the stock. LADENBURG THALM/SH SH upgraded shares of SoundHound AI to a “strong-buy” rating in a research report on Wednesday. Piper Sandler reaffirmed a “neutral” rating and issued a $9.00 price target (down from $11.00) on shares of SoundHound AI in a research note on Friday, February 27th. DA Davidson reaffirmed a “buy” rating and issued a $14.00 price target on shares of SoundHound AI in a research note on Wednesday, April 22nd. HC Wainwright cut their price target on shares of SoundHound AI from $26.00 to $20.00 and set a “buy” rating on the stock in a research note on Monday, March 2nd. Finally, Zacks Research raised shares of SoundHound AI from a “strong sell” rating to a “hold” rating in a research note on Monday, February 9th. One equities research analyst has rated the stock with a Strong Buy rating, five have given a Buy rating, three have assigned a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and a consensus price target of $14.93.

Insider Activity

In other SoundHound AI news, insider James Ming Hom sold 31,019 shares of the company’s stock in a transaction on Friday, March 20th. The shares were sold at an average price of $6.79, for a total transaction of $210,619.01. Following the sale, the insider directly owned 772,364 shares of the company’s stock, valued at approximately $5,244,351.56. This represents a 3.86% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, CFO Nitesh Sharan sold 44,027 shares of the company’s stock in a transaction on Friday, March 20th. The stock was sold at an average price of $6.79, for a total transaction of $298,943.33. Following the sale, the chief financial officer directly owned 1,661,121 shares in the company, valued at $11,279,011.59. This trade represents a 2.58% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last three months, insiders sold 307,973 shares of company stock valued at $2,091,110. 8.84% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On SoundHound AI

Several institutional investors and hedge funds have recently modified their holdings of the stock. EP Wealth Advisors LLC increased its holdings in shares of SoundHound AI by 5.3% in the second quarter. EP Wealth Advisors LLC now owns 14,100 shares of the company’s stock valued at $151,000 after purchasing an additional 706 shares during the last quarter. Newbridge Financial Services Group Inc. increased its holdings in shares of SoundHound AI by 2.7% in the third quarter. Newbridge Financial Services Group Inc. now owns 31,880 shares of the company’s stock valued at $513,000 after purchasing an additional 830 shares during the last quarter. Insigneo Advisory Services LLC increased its holdings in shares of SoundHound AI by 7.4% in the third quarter. Insigneo Advisory Services LLC now owns 12,416 shares of the company’s stock valued at $200,000 after purchasing an additional 858 shares during the last quarter. Clear Creek Financial Management LLC increased its holdings in shares of SoundHound AI by 1.6% in the fourth quarter. Clear Creek Financial Management LLC now owns 58,091 shares of the company’s stock valued at $579,000 after purchasing an additional 941 shares during the last quarter. Finally, PNC Financial Services Group Inc. increased its holdings in shares of SoundHound AI by 15.5% in the third quarter. PNC Financial Services Group Inc. now owns 7,127 shares of the company’s stock valued at $115,000 after purchasing an additional 956 shares during the last quarter. 19.28% of the stock is currently owned by institutional investors and hedge funds.

SoundHound AI Stock Down 7.8%

The stock has a market capitalization of $3.75 billion, a price-to-earnings ratio of -18.89 and a beta of 2.58. The company’s fifty day simple moving average is $7.57 and its 200 day simple moving average is $10.18.

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.