Shares of SoundHound AI (SOUN) slipped in after-hours trading after the voice AI software company reported earnings for its third quarter of Fiscal Year 2024. Earnings per share came in at -$0.04, which beat analysts’ consensus estimate of -$0.07 per share. Sales increased by 88.6% year-over-year, with revenue hitting $25.09 million. This also beat analysts’ expectations of $23.02 million.
SoundHound Updates Guidance
Looking forward, management has provided the following updated guidance for 2024 and 2025:
- FY24 revenue between $82 million and $85 million versus estimates of $82.57 million
- FY25 revenue between $155 million and $175 million versus estimates of $152.1 million
As you can see, guidance was better than expected, but the stock still fell. This is likely because shares rallied over 28% during the past five days heading into earnings. As a result, today’s earnings beat was probably priced in already, which led to a “sell-the-news” event.
Investor Sentiment for SOUN Stock
The sentiment among TipRanks investors is currently very positive. Out of the 763,302 portfolios tracked by TipRanks, 1.7% hold SOUN stock. In addition, the average portfolio weighting allocated towards SOUN among those who do have a position is 5.05%. This suggests that investors in the company are fairly confident about its future.
What’s interesting about the 1.7% figure is that it has increased from 1.3% since the last earnings report. This means that investor interest in the stock is increasing, and if the company keeps up its solid growth rate, there is plenty of room for more investors to pile in, which could potentially push the stock higher.
Is SOUN Stock a Good Investment?
Turning to Wall Street, analysts have a Strong Buy consensus rating on SOUN stock based on four Buys, one Hold, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 290% rally in its share price over the past year, the average SOUN price target of $7.70 per share implies 1% downside risk. However, it’s worth noting that estimates will likely change following today’s earnings report.
