SoundHound AI (SOUN) is scheduled to announce its third-quarter results on Thursday, November 6. Heading into the results, Wall Street is moderately bullish on SOUN stock. Meanwhile, options market is bracing for a strong reaction. According to TipRanks’ Options Tool, traders expect SOUN stock to move about 11.86% in either direction following the Q3 results.
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SoundHound AI focuses on voice recognition and natural language processing, delivering AI-driven solutions across multiple industries. Year-to-date, SOUN stock is down over 20%, but it has still gained more than 60% in the past six months, highlighting its volatile nature.
Options Traders Anticipate Major Move on SOUN’s Q3 Earnings
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is calculated using the at-the-money options that are closest to expiration after the earnings announcement.
The projected change of more than 11% indicates that investors are preparing for significant price fluctuations as they await news on SOUN’s business growth and profitability.
What Analysts Expect from SoundHound’s Q3 Results
For Q3, Wall Street analysts expect SoundHound to report a loss of $0.09 per share in Q3 as compared to $0.06 in the same quarter a year ago. Meanwhile, analysts expect SoundHound’s revenue to climb over 60% year over year to $40.5 million in Q3.
In the previous quarter (Q2), SoundHound AI smashed analysts’ expectations, reporting $42.68 million in revenue, up 217% year-over-year and 31.2% above estimates. The company also exceeded billing and EBITDA forecasts, marking an exceptionally strong quarter.
The revenue growth is mainly driven by rising demand for the company’s voice AI solutions. Looking ahead, the company expects its full-year revenue to range between $160 million and $178 million, slightly above analysts’ estimate of $161.2 million.
Wainwright’s View on SOUN Ahead of Q3 Earnings
Ahead of Q3 results, four-star-rated analyst Scott Buck of H.C. Wainwright raised his price target from $18 to a Street-high of $26, suggesting the stock could climb over 40% from current levels, even if it seems pricey.
Meanwhile, Buck expects SoundHound’s real growth story to play out as more industries adopt its voice AI technology, helping the company scale, boost revenue, and move toward profitability. He also highlighted that the upcoming Q3 earnings could act as a key catalyst for further gains.
Is SOUN a Good Stock to Buy?
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 $16.67, suggesting a potential upside of 6% from the current level.
