Analyst Scott Buck of H.C. Wainwright reiterated a Buy rating on SoundHound AI, Inc Class A, retaining the price target of $18.00.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Scott Buck has given his Buy rating due to a combination of factors surrounding SoundHound AI, Inc’s recent strategic acquisition of Interactions Corporation. The acquisition is expected to enhance SoundHound’s profitability immediately and provide substantial opportunities for cross-selling and upselling, leveraging Interactions’ existing customer base. This move is seen as a continuation of SoundHound’s successful strategy demonstrated with the acquisition of Amelia, which has increased confidence in management’s ability to replicate this success.
Furthermore, the valuation of SoundHound shares at a 32.0x EV/revenue multiple reflects a premium justified by the company’s strong backlog of subscriptions and bookings, which have surpassed $1.0 billion. The anticipated acceleration in revenue growth, coupled with the scarcity of pure-play AI companies, supports this valuation. Despite no changes to current estimates, the potential for upward revisions exists, given the expected accretive nature of the acquisition. These factors collectively underpin the $18 price target, representing a significant upside from current trading levels.
In another report released on September 9, D.A. Davidson also maintained a Buy rating on the stock with a $17.00 price target.
Based on the recent corporate insider activity of 67 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SOUN in relation to earlier this year.