SoundHound AI Q1 Earnings Preview: Is SOUN Stock Fairly Valued Under $10?
SoundHound AI is set to release its Q1 earnings report, leading investors to question if the stock is fairly valued under $10. The company's financial performance and future outlook will be closely scrutinized by analysts and shareholders. The earnings preview will provide insights into SoundHound AI's growth trajectory and potential market opportunities. Investors are eagerly awaiting the earnings report to make informed decisions about the stock's valuation.
SoundHound AI (SOUN) is approaching its first-quarter 2025 earnings report after the market closes on May 8, with analysts projecting revenues of $30.2 million, representing a substantial 160.6% year-over-year increase. The company's previous quarter featured a 101.5% revenue surge, primarily driven by expansion in quick-service restaurants and the automotive sector. Despite facing challenges related to internal controls and financial reporting, particularly concerning the accounting complexities of recent acquisitions like SYNQ3 and Amelia, SoundHound's core business shows strong momentum.
What’s Driving Growth at SoundHound AI
The voice AI specialist has established a significant presence in the restaurant industry, serving over 10,000 locations and securing partnerships with major brands like Burger King UK. Strategic collaborations, including an expanded partnership with Nvidia (NVDA) for enhanced voice AI capabilities, have strengthened SoundHound's market position. The company's expansion beyond core markets into healthcare, energy, and retail sectors is evidenced by new contracts with Duke Health, Wellstar Health, and various utility companies.
SoundHound's cumulative bookings backlog has grown impressively to $1.2 billion, representing a 75% year-over-year increase and providing strong revenue visibility. Management projects 2025 revenue between $157-177 million, potentially maintaining the robust 85% growth rate reported in 2024. The company aims to achieve adjusted EBITDA profitability this year, though concerns persist about its substantial losses and cash burn rate.
How is SOUN Stock Performing?
SOUN stock has been volatile over the past 52 weeks, ranging from a low of $3.82 to a high of $24.98, and now currently trading just under $10 per share. Recent developments, including Nvidia's complete divestment of its SoundHound position in Q4 2024, have contributed to the stock’s volatility. That said, SoundHound shares have more than doubled over the past year, easily outperforming the broader equities market - and gaining 26.8% over the past month alone. Heading into this week’s earnings report, options traders are betting on more big price swings, with SOUN’s at-the-money straddle reflecting expectations for a nearly 12% move in either direction. That would actually be a relatively tame move by SoundHound’s standards; the stock boasts an average earnings reaction of 15.7% over the past four quarters.
Is SoundHound AI Stock a Good Buy?
The company's substantial order backlog and projected revenue growth present promising indicators, though investors must carefully weigh the current valuation against ongoing operational challenges. SOUN trades at a premium valuation of 22.6 times forward sales, and remains unprofitable. On the other hand, analyst sentiment is generally positive, with three out of six rating SOUN a "Strong Buy" and setting an average price target of $13.92, suggesting about 51.5% upside potential. This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor had a position in: SOUN , NVDA. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.