SoundThinking Inc (SSTI) AI Stock Analysis

• Market Cap: $88.64M
• Dividend Yield: N/A
• Average Volume (3M): 162.01K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.20
• Revenue Growth: -1.83%
• EPS Growth: -642.89%
• Country: US
• Employees: 316
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -0.16
• Shares Outstanding: 12,698,453
• 10 Day Avg. Volume: 153,918
• 30 Day Avg. Volume: 162,011
• PEG Ratio: -0.08
• Price to Book (P/B): 2.29
• Price to Sales (P/S): 1.63
• P/FCF Ratio: 10.51
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 0.80
• Enterprise Value/Gross Profit: 1.48
• Enterprise Value/Ebitda: -176.41
• 1Y Price Target: $14.20
• Price Target Upside: 103.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 49 Neutral
• Price Target: $7.00 ▲(0.29% Upside)

SoundThinking Inc's overall stock score reflects significant financial challenges, including declining revenues and profitability issues. While technical indicators suggest a bearish trend, there are some positive developments in AI adoption and international expansion. However, the negative valuation metrics and reduced guidance weigh heavily on the stock's attractiveness.

Positive Factors

Gross Margin Stability

A sustained gross margin above 50% reflects strong unit economics from software and analytics offerings. This margin buffer supports scalable deployment as revenue grows, enabling the company to absorb higher R&D and deployment costs while preserving potential operating leverage over the medium term.

Low Leverage / Strong Capital Base

Very low leverage and a healthy equity ratio give the company financial flexibility to fund product development, international rollouts, and hiring without large interest burdens. This balance sheet strength reduces solvency risk and supports strategic investments despite near-term revenue headwinds.

Product Innovation & AI Momentum

Launch of Crime Tracer Gen 3 and broader AI adoption enhances differentiation via proprietary data integrations and voice-enabled capabilities. Product innovation increases customer stickiness, expands TAM and supports subscription and services revenue, creating durable competitive advantage if commercialized effectively.

Negative Factors

Declining Revenue & Profitability

Ongoing revenue declines and persistent negative profitability hinder the company's ability to scale fixed-cost investments and achieve operating leverage. If revenue contraction continues, it will constrain reinvestment capacity and prolong the path to sustainable margins and positive returns for shareholders.

Severely Weak Free Cash Flow

Highly negative free cash flow growth and poor conversion of earnings to cash limit internal funding for R&D, hiring, and deployment centers. This increases reliance on external capital and raises execution risk for international expansion and product rollouts over the next several quarters.

Sales Execution & Contract Delays

Documented sales execution problems and delayed large contracts reduce revenue visibility and extend sales cycles, particularly in government and municipal markets. These structural go-to-market weaknesses threaten recurring bookings and make margin recovery dependent on sustained fixes to sales effectiveness.

SoundThinking Inc Business Overview & Revenue Model

Company Description

SoundThinking, 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 Money

SoundThinking Inc generates revenue through multiple streams, primarily by selling software licenses for its audio analytics platforms and providing subscription-based services for ongoing support and updates. Key revenue streams include direct sales to government agencies, law enforcement, and private security firms, as well as partnerships with technology providers for integrated solutions. Additionally, SSTI earns income through consulting services aimed at customizing their offerings for specific client needs and conducting training programs for end-users. Significant collaborations with municipalities and public safety organizations further enhance its market presence and contribute to its earnings.

SoundThinking Inc Financial Statement Overview

Summary

SoundThinking Inc is facing financial challenges with declining revenues and profitability issues. Despite a stable balance sheet with low leverage, negative cash flow trends and inefficiencies in generating returns are concerning. The company needs to enhance revenue growth, optimize costs, and improve cash flow management.

Income Statement

SoundThinking Inc's income statement shows a declining revenue trend with a negative revenue growth rate of -1.11% TTM. The company is facing profitability challenges, as evidenced by negative net profit and EBIT margins. Gross profit margin remains relatively stable at 54.43% TTM, but the negative net profit margin of -10.44% indicates ongoing losses. The company needs to address its cost structure and improve revenue generation to enhance profitability.

Balance Sheet

The balance sheet of SoundThinking Inc reflects a low debt-to-equity ratio of 0.066 TTM, indicating conservative leverage. However, the return on equity is negative at -14.58% TTM, highlighting inefficiencies in generating returns for shareholders. The equity ratio is healthy, suggesting a strong capital base, but the company needs to improve its profitability to enhance shareholder value.

Cash Flow

SoundThinking Inc's cash flow statement reveals a significant decline in free cash flow growth rate of -116.20% TTM, indicating cash flow challenges. The operating cash flow to net income ratio is low at 0.073 TTM, suggesting difficulties in converting earnings into cash. The company must focus on improving its cash flow management to support operations and future growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	102.75M	102.03M	92.72M	81.00M	58.16M	45.73M
Gross Profit	55.92M	58.49M	52.84M	46.78M	32.52M	27.21M
EBITDA	-468.00K	2.60M	9.17M	7.79M	4.09M	7.11M
Net Income	-10.73M	-9.18M	-2.72M	6.38M	-4.43M	1.23M
Balance Sheet
Total Assets	134.43M	136.79M	140.94M	122.75M	72.30M	66.32M
Cash, Cash Equivalents and Short-Term Investments	11.83M	13.18M	5.70M	10.48M	15.64M	16.04M
Total Debt	5.76M	6.05M	9.51M	3.42M	2.42M	945.00K
Total Liabilities	60.88M	64.39M	66.18M	61.80M	38.49M	32.01M
Stockholders Equity	73.55M	72.40M	74.76M	60.95M	33.81M	34.30M
Cash Flow
Free Cash Flow	-1.07M	15.79M	5.46M	1.26M	1.92M	7.08M
Operating Cash Flow	3.95M	22.22M	10.95M	12.18M	9.82M	11.21M
Investing Cash Flow	-5.03M	-6.43M	-16.48M	-15.54M	-7.88M	-18.76M
Financing Cash Flow	-2.30M	-8.25M	795.00K	-1.75M	-2.27M	-956.00K

SoundThinking Inc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.98
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 6.98 is below the 20-day moving average (MA) of 7.97, below the 50-day MA of 7.48, and below the 200-day MA of 11.58, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 35.37 is Neutral, neither overbought nor oversold. The STOCH value of 18.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SSTI.

SoundThinking Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
MAPS	60 Neutral	$121.51M	10.29	18.24%	―	0.59%	―
SMRT	51 Neutral	$306.51M	-4.54	-25.48%	―	-24.30%	-181.62%
SSTI	49 Neutral	$88.64M	-8.24	-14.61%	―	-1.83%	-642.89%
AEYE	48 Neutral	$116.98M	-32.98	-54.03%	―	18.57%	-2.15%
PSQH	48 Neutral	$40.15M	-0.67	-451.95%	―	35.79%	14.85%
MRT	45 Neutral	$157.42M	-1.76	―	―	―	―