Shares of SoundHound AI, Inc. (SOUN) are drawing attention as the company grows in the AI-powered voice technology space. Meanwhile, TipRanks A.I. analysis is urging investors to exercise caution, citing uncertainties around profitability and valuation.
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For context, TipRanks’ A.I. Stock Analysis delivers automated, data-driven evaluations of stocks based on key performance metrics, giving investors a clear and concise snapshot of a stock’s potential.
SOUN Earns Neutral Rating
According to TipRanks A.I., SOUN stock currently scores 57 out of 100 and carries a price target of $16, suggesting a potential upside of over 11%. The SOUN stock rating reflects strong revenue growth and encouraging earnings call highlights, including smooth integration of recent acquisitions and expansion into multiple sectors.
Additionally, technical indicators show upward momentum, but the stock’s valuation is high compared to earnings, signaling that investors should proceed cautiously. The analysis also highlights both the positive and negative factors influencing the company’s stock performance. Below is the screenshot for reference.
AI Analyst Flags Profitability Challenges
According to A.I. analysis, SoundHound still faces profitability challenges, with negative net margins and elevated operating costs. In Q2, SoundHound saw revenue rise but posted an adjusted net loss of $11.9 million, or $0.03 per share. In addition, gross margins fell to 39% due to low-margin acquired contracts. However, management expects them to rebound to around 70% within 18–24 months through automation and changes in product mix.
Here’s a snapshot from the company’s recent earnings call, summarizing both the positive developments and the key challenges.
What Is the Price Target for SOUN?
According to TipRanks, SOUN stock has received a Moderate Buy consensus rating, with five Buys and two Holds assigned in the last three months. The average SoundHound stock price target is $15.43, suggesting a potential upside of 8% from the current level.
