SoundHound AI (SOUN), a tech firm focused on AI-driven voice technology solutions, will release its Q2 results on August 8. Wall Street analysts expect the company to report a loss of $0.09 per share for Q2 2024, versus a $0.10 per share loss reported in the prior-year quarter. Meanwhile, analysts expect revenues of $13.09 million, reflecting a 50% year-over-year increase, according to TipRanks’ data.
This penny stock is currently priced at $4.46 and has gained 119.7% over the past year, benefiting from the AI boom. (learn more about penny stocks here.)
SOUN’s Major Development Ahead of Q2
Last month, the company expanded its partnership with automaker Stellantis (STLA) to integrate voice assistants integrated with ChatGPT into vehicle digital assistants across 17 European markets using 12 languages. This integration will enable users to tackle more complex tasks beyond basic voice commands.
The partnership signals significant revenue expansion opportunities for SoundHound in the future.
Key Takeaways from TipRanks’ Bulls & Bears Tool
TipRanks’ Bulls Say, Bears Say tool pictured below shows optimism for SoundHound AI, with bulls highlighting strong revenue potential from growth in the automotive and IoT sectors. They also note that SOUN’s Q1 revenue of $11.6 million surpassed expectations, reflecting the high demand for its voice AI services. Additionally, the analysts believe that if Nvidia (NVDA) increases its stake in SOUN, it could lead to renewed optimism in SoundHound’s shares, representing a potential upside.
However, it’s important to keep the bearish arguments in mind. Bears say that mounting competition from major tech companies could continue to pressure its valuation. They also note that the timeline for achieving profitability is now expected to shift from Q4 to sometime in 2025, as the company continues to invest heavily in growth.
Options Traders Anticipate a Large Move
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 determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 16.14% move in either direction.
Is SoundHound a Buy Stock?
Overall, the Street has a Strong Buy consensus rating on SOUN, alongside an average price target of $7.50. The price target points toward a 12-month gain of 68%. However, analysts’ views on the stock are likely to change once the company reports its Q2 earnings tomorrow.
Bottom Line
Analysts remain positive about the company’s expanding revenue potential. They anticipate that SOUN will report a strong top line in Q2, fueled by robust demand for its Voice AI services in sectors like automotive and IoT. However, rising competition and substantial investments may continue to add pressure on the company’s bottom line.
