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SoundThinking Inc (SSTI)
NASDAQ:SSTI
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SoundThinking Inc (SSTI) AI Stock Analysis

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SSTI

SoundThinking Inc

(NASDAQ:SSTI)

Rating:60Neutral
Price Target:
$14.00
▲(15.42%Upside)
SoundThinking Inc's overall stock score is primarily driven by its strong earnings call performance and positive corporate events, indicating potential growth and strategic opportunities. However, technical analysis and valuation concerns weigh heavily on the score, reflecting current market challenges and profitability issues.
Positive Factors
Guidance Above Expectations
Management raised FY25 revenue guidance to $111.0M-$113.0M, above the consensus of $107.9M, signaling confidence in future growth.
International Expansion
The recently announced multi-year contract for the City of Niteroi indicates strong international momentum.
Legislation Opportunities
California recently passed Assembly Bill 2975, which mandates hospitals to deploy weapons detection systems at all public entrances, creating a significant market opportunity.
Negative Factors
Contract Expirations
The high-profile Chicago ShotSpotter contract expired, resulting in a loss of revenue from this source.
Delayed Renewals
Financial results were impaired primarily due to delayed renewals of two NYPD contracts, highlighting challenges in contract management.
Revenue Decrease
Revenue decreased 10% to $23.4M and was below consensus, reflecting a decline in financial performance.

SoundThinking Inc (SSTI) vs. SPDR S&P 500 ETF (SPY)

SoundThinking Inc Business Overview & Revenue Model

Company DescriptionSoundThinking, Inc., a public safety technology company, provides data-driven solutions and strategic advisory services for law enforcement, security teams, and civic leadership. Its SafetySmart platform that includes data-driven tools comprising ShotSpotter, an outdoor gunshot detection, location, and alerting system; CrimeTracer, a law enforcement search engine that enables investigators to search through criminal justice records from across jurisdictions to generate tactical leads and solve cases; CaseBuilder, an investigative management system for tracking, reporting, and collaborating on cases; ResourceRouter, a software that directs deployment of patrol and community anti-violence resources; PlateRanger powered by Rekor, an advanced license plate recognition (ALPR) and vehicle identification solution; and SafePointe, an artificial intelligence-based weapons detection system. The company also offers ShotSpotter for Campus and ShotSpotter for Corporate, to universities, corporate campuses, and key infrastructure centers to mitigate risk and enhance security by notifying authorities of outdoor gunfire incidents and save critical minutes for first responders to arrive. It sells its solutions through its direct sales teams. The company was formerly known as ShotSpotter, Inc. and changed its name to SoundThinking, Inc. in April 2023. SoundThinking, Inc. was founded in 1996 and is headquartered in Fremont, California.
How the Company Makes MoneySoundThinking Inc generates revenue primarily through subscription-based services for its ShotSpotter gunshot detection technology. Clients, typically law enforcement agencies and municipalities, pay recurring fees for access to the company's proprietary network of acoustic sensors and real-time alert systems. Additionally, the company offers analytical services and software solutions that provide data insights and reports to help optimize law enforcement strategies and resource allocation. Significant partnerships with government agencies and law enforcement bodies further contribute to its revenue, as these collaborations often lead to long-term contracts and service agreements.

SoundThinking Inc Earnings Call Summary

Earnings Call Date:May 13, 2025
(Q1-2025)
|
% Change Since: -25.22%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
SoundThinking's earnings call reflected a positive outlook with significant revenue growth, successful contract renewals, and international expansion, despite some challenges related to increased expenses and potential cost impacts due to tariffs.
Q1-2025 Updates
Positive Updates
Revenue Growth
SoundThinking delivered a 12% revenue growth year-over-year, reaching $28.3 million, driven by solid new sales and renewal activity.
Adjusted EBITDA Increase
Adjusted EBITDA grew 50% year-over-year to $4.5 million, highlighting operational leverage and a profitable growth strategy.
NYPD Contract Renewal
The New York City Police Department extended their ShotSpotter contract for an additional three years, totaling $64 million over a 3-year term.
International Expansion
SoundThinking expanded its ShotSpotter deployment internationally, with a new deployment in Niteroi, Brazil, marking a return to the Brazilian market.
SafePointe Legislative Opportunity
Following the passage of California Assembly Bill 2975, hospitals are required to deploy weapon detection systems at all public entrances by 2027, creating a significant market opportunity for SafePointe.
Innovation in CrimeTracer
CrimeTracer has evolved into a powerful AI-enhanced law enforcement tool, now integrating generative AI and large language models for insightful data analysis.
Negative Updates
Potential Cost Increases
The adjusted EBITDA margin guidance was reduced to 20% to 22% due to potential costs associated with tariff changes and investments in AI modeling and tools.
Municipal Funding Concerns
There are lingering headwinds related to municipal funding and budgets, which could impact future growth.
Q1 Expenses
The first quarter included higher expenses due to an annual all-hands meeting costing over $700,000 and increased legal and accounting costs.
Company Guidance
During SoundThinking's Q1 2025 earnings call, the company reported a strong financial performance with a 12% revenue growth year-over-year, reaching $28.3 million, and a 50% increase in adjusted EBITDA to $4.5 million. The growth was driven by new sales and contract renewals, notably a three-year $64 million contract with the NYPD. SoundThinking reaffirmed its full-year revenue guidance of $111-$113 million but adjusted its EBITDA margin guidance to 20-22% due to investments in AI and tariff impacts. The company highlighted international expansion, with a ShotSpotter deployment in Brazil, and emphasized the growth potential of its SafePointe product following new legislative requirements in California. They also noted ongoing strategic initiatives across various platforms, including ResourceRouter and CrimeTracer, as well as the integration of PlateRanger's data for enhanced investigative capabilities.

SoundThinking Inc Financial Statement Overview

Summary
SoundThinking Inc shows a solid revenue growth trend and strong cash flow management, although it struggles with profitability and equity stability. The positive cash flow and revenue growth are offset by negative profitability metrics.
Income Statement
67
Positive
SoundThinking Inc has shown a steady increase in revenue over the years, with a notable increase from 2021 to TTM (Trailing-Twelve-Months). However, the company is struggling with profitability, as indicated by negative EBIT and net income margins, particularly in the TTM period.
Balance Sheet
72
Positive
The company's balance sheet shows a healthy equity position with a reasonable debt-to-equity ratio. However, the recent decrease in stockholders' equity and the presence of net losses could indicate potential stability risks if not addressed.
Cash Flow
75
Positive
SoundThinking Inc demonstrates strong operating cash flow, which consistently covers its capital expenditures resulting in positive free cash flow. The company has maintained a stable free cash flow to net income ratio, despite net income losses, showcasing good cash management practices.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue102.03M92.72M81.00M58.16M45.73M
Gross Profit58.49M52.84M46.78M32.52M26.98M
EBITDA1.82M9.17M7.75M4.11M6.88M
Net Income-9.18M-2.72M6.38M-4.43M1.23M
Balance Sheet
Total Assets136.79M138.71M122.75M72.30M66.32M
Cash, Cash Equivalents and Short-Term Investments13.18M5.70M10.48M15.64M16.04M
Total Debt6.05M8.54M3.42M2.42M945.00K
Total Liabilities64.39M63.95M61.80M38.49M32.02M
Stockholders Equity72.40M74.76M60.95M33.81M34.30M
Cash Flow
Free Cash Flow15.79M5.90M1.26M1.92M7.08M
Operating Cash Flow22.22M10.95M12.18M9.82M11.21M
Investing Cash Flow-6.43M-16.48M-15.54M-7.88M-18.76M
Financing Cash Flow-8.25M795.00K-1.75M-2.27M-956.00K

SoundThinking Inc Technical Analysis

Technical Analysis Sentiment
Negative
Last Price12.13
Price Trends
50DMA
14.56
Negative
100DMA
15.39
Negative
200DMA
14.07
Negative
Market Momentum
MACD
-0.66
Positive
RSI
31.11
Neutral
STOCH
23.02
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SSTI, the sentiment is Negative. The current price of 12.13 is below the 20-day moving average (MA) of 13.13, below the 50-day MA of 14.56, and below the 200-day MA of 14.07, indicating a bearish trend. The MACD of -0.66 indicates Positive momentum. The RSI at 31.11 is Neutral, neither overbought nor oversold. The STOCH value of 23.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SSTI.

SoundThinking Inc Risk Analysis

SoundThinking Inc disclosed 56 risk factors in its most recent earnings report. SoundThinking Inc reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

SoundThinking Inc Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
68
Neutral
¥234.20B14.887.50%2.60%9.27%5.76%
67
Neutral
$163.20M-76.11%16.52%-1.28%
61
Neutral
$101.55M-223.65%221.24%13.36%
60
Neutral
$157.15M-10.44%7.65%-96.35%
60
Neutral
$146.81M12.0523.24%0.20%
56
Neutral
$205.11M-22.66%-25.43%-135.09%
43
Neutral
$205.86M103.42%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SSTI
SoundThinking Inc
12.13
-2.71
-18.26%
AEYE
AudioEye
14.51
-12.49
-46.26%
MAPS
WM Technology
0.97
-0.16
-14.16%
SMRT
SmartRent
1.14
-1.26
-52.50%
PSQH
PSQ Holdings
2.24
-0.46
-17.04%
MRT
Marti Technologies
2.73
1.08
65.45%

SoundThinking Inc Corporate Events

Executive/Board ChangesShareholder Meetings
SoundThinking Inc Holds 2025 Annual Stockholders Meeting
Positive
Jun 5, 2025

On June 4, 2025, SoundThinking, Inc. held its 2025 Annual Meeting of Stockholders where three key proposals were voted on. Stockholders approved the election of two Class II directors, the compensation of named executive officers, and the appointment of Baker Tilly US, LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. These approvals ensure continuity in leadership and financial oversight, potentially strengthening the company’s strategic direction and operational stability.

The most recent analyst rating on (SSTI) stock is a Buy with a $21.00 price target. To see the full list of analyst forecasts on SoundThinking Inc stock, see the SSTI Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 28, 2025