As the first-quarter earnings season gains momentum, investors are closely watching smaller-cap stocks like Rocket Lab (RKLB) and SoundHound AI (SOUN). Both companies, part of the Russell 2000 index, are set to report Q1 earnings on May 8 that could influence their near-term stock performance. With analysts showing cautious optimism, upcoming results may be a key indicator of their momentum in a volatile market.
Let’s dive into the details.
Rocket Lab USA
Rocket Lab specializes in the development and launch of small satellite launch vehicles. Wall Street analysts expect Rocket Lab to report a loss of $0.11 per share in Q2, compared to a loss of $0.06 in the same quarter last year. Revenue for the next quarter is projected to be around $121.37 million, down from $132.39 million in sales in the previous quarter. The company had beaten revenue expectations 75% of the time over the past year.
Apart from the financial performance, the delay of the company’s Neutron rocket’s test launch to the second half of 2025 has been a point of focus. Investors are interested in updates regarding the development timeline, budget adherence, and potential impacts on future revenue streams.
Is Rocket Lab Stock a Buy?
According to TipRanks, RKLB stock has received a Moderate Buy consensus rating, with nine Buys and four Holds assigned in the last three months. The average Rocket Lab stock price target is $27.91, suggesting a potential upside of 21.4% from the current level.
SoundHound AI
SoundHound AI specializes in voice recognition and natural language processing, offering AI-driven solutions across industries.
According to Wall Street analysts, SoundHound is expected to report negative EPS of $0.09 in Q2 FY25, compared to $0.12 in the same quarter a year ago. For revenue, the company is expected to generate sales of $30.86 million, with estimates ranging from $30.03 million to $34.50 million. This comes after the company reported $34.54 million in sales for the previous quarter. Notably, SOUN has exceeded its sales estimates 100% of the time over the past 12 months.
Is SoundHound Stock a Good Buy?
Overall, analysts have a Moderate Buy consensus rating on SoundHound stock based on three Buys and two Hold recommendations. The average SOUN stock price target of $14.90 implies a 59% upside potential.
