SoundHound AI Reports Quarterly Earnings, Falls Short of Estimates

SoundHound AI (NASDAQ:SOUN) announced its quarterly earnings results on Thursday, revealing disappointing figures. The company reported earnings of ($0.69) per share for the quarter. This performance was significantly lower than analysts' average estimate of ($0.11), resulting in a miss of ($0.58) per share, as reported by Zacks.

In addition to the earnings miss, SoundHound AI also faced challenges in profitability, as it recorded a negative net margin of 163.58%. Furthermore, the return on equity for the company stood at a negative 55.58%, indicating ongoing financial difficulties.

Stock Performance and Trading Activity

After the earnings announcement, shares of SoundHound AI saw a decline of 3.8%, trading down by $0.36 to reach a price of $9.21. Throughout the day, 57,369,602 shares exchanged hands, surpassing the company’s average trading volume of 55,670,492 shares. The stock has experienced significant volatility over the past year, with a 1-year low of $3.50 and a high of $24.98. As of now, the company maintains a market capitalization of $3.62 billion and has a P/E ratio of -25.58 with a beta of 2.56.

Insider Transactions

Recently, there have been notable insider sales at SoundHound AI. CEO Keyvan Mohajer disposed of 465,394 shares in a transaction on December 9, resulting in a total of approximately $7 million. Post-transaction, he retains 2,299,148 shares valued around $34.58 million, but this reflects a 16.83% decrease in his ownership. Similarly, VP Majid Emami sold 94,067 shares for about $851,306 a week earlier.

In total, insiders have sold 2,722,918 shares of SoundHound AI within the last 90 days, amounting to nearly $44.94 million, indicating a significant sell-off among company executives. Currently, insiders hold about 12.28% of the company's stock.

Market Analysts' Opinions

Following the earnings announcement, several analysts provided their outlook on SoundHound AI shares. Cantor Fitzgerald has upgraded the stock to a "hold" rating. Meanwhile, Northland Securities raised its target price for the shares from $6.00 to $8.00, assigning a "market perform" rating. Other firms, such as LADENBURG THALM/SH SH and Barclays, have maintained a neutral rating with target prices around $7.00. Analysts have diverse views on SoundHound AI, reflected in a consensus rating of "Hold" with an average target price set at $12.36.

Company Overview

SoundHound AI, Inc. specializes in developing voice artificial intelligence solutions for various industries, including automotive and customer service. Their products include the Houndify platform, which offers tools for building conversational voice assistants, as well as SoundHound Chat AI and SoundHound Smart Answering, aimed at enhancing customer interactions.

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