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SoundThinking Inc (SSTI)
NASDAQ:SSTI
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SoundThinking Inc
(NASDAQ:SSTI)
71Outperform
Positive Factors
Contract Renewals
A three-year $21.7M ShotSpotter renewal contract has already been signed with the city.
Revenue Guidance
Management raised FY25 revenue guidance to $111.0M-$113.0M, above the consensus of $107.9M.
Negative Factors
Contract Expiration
The high-profile Chicago ShotSpotter contract expired.
Revenue Decrease
Revenue decreased 10% to $23.4M and was below consensus, with a decline in AEBITDA and gross margin.
SoundThinking Inc (SSTI) vs. S&P 500 (SPY)
Market Cap
$192.73M
Dividend YieldN/A
Average Volume (3M)56.21K
Price to Earnings (P/E)―
Beta (1Y)1.51
Revenue Growth19.39%
EPS Growth81.08%
CountryUS
Employees53
SectorTechnology
Sector Strength45
IndustrySoftware
Share Statistics
EPS (TTM)-0.72
Shares Outstanding12,588,530
10 Day Avg. Volume72,480
30 Day Avg. Volume56,209
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.84
Price to Cash Flow (P/CF)3.50
P/FCF Ratio3.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$21.75Price Target Upside41.51% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
SoundThinking Inc Business Overview & Revenue Model
Company DescriptionShotSpotter, Inc. provides gunshot detection solutions that help law enforcement officials and security personnel identify, locate, and respond to gun violence. It offers solutions on a fobased subscription model to customers around the world. The company was founded by Robert B. Calhoun, Jason Dunham, and Robert Leroy Showen in 1996 and is headquartered in Newark, CA.
How the Company Makes MoneySoundThinking Inc generates revenue primarily through the sale and subscription of its gunshot detection services to law enforcement agencies and municipalities. The company employs a Software-as-a-Service (SaaS) model, offering its ShotSpotter solution on a subscription basis, which includes installation, maintenance, and ongoing data services. Key revenue streams include annual service fees for the use of its detection systems, as well as additional fees for expanded service areas or enhanced features. SoundThinking also partners with public safety organizations and government agencies to integrate its technology into broader security initiatives, further supporting its earnings.
SoundThinking Inc Financial Statement Overview
Summary
SoundThinking Inc is displaying positive revenue and free cash flow growth, underscoring operational improvements. However, consistent net losses and a negative return on equity signal profitability concerns. The company's balance sheet is stable, with manageable leverage and adequate equity. Continuous focus on profitability and cash flow management will be crucial for financial health.Income Statement
SoundThinking Inc has shown consistent revenue growth, with a notable increase from $81 million in 2022 to $104.7 million TTM. However, net income remains negative, indicating profitability issues. The gross profit margin is fairly strong at approximately 58.8% TTM, but the net profit margin is negative, reflecting ongoing profitability challenges. The company's EBITDA margin improved, suggesting better operational efficiency despite the negative EBIT margin.70
Positive
Balance Sheet
The company maintains a moderate debt-to-equity ratio of approximately 0.09 TTM, indicating conservative leverage. Stockholders' equity has been stable, supporting a decent equity ratio of around 51.7%. However, the negative net income affects the return on equity, leading to a negative ROE, highlighting profitability issues.65
Positive
Cash Flow
SoundThinking Inc has demonstrated strong free cash flow growth, increasing from $5.9 million in 2023 to $17.7 million TTM. The operating cash flow to net income ratio is robust, indicating efficient cash generation relative to net earnings. The free cash flow to net income ratio is positive, suggesting healthy cash flow management despite the negative net income.75
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 104.67M | 92.72M | 81.00M | 58.16M | 45.73M | 40.75M | Gross Profit |
| 61.59M | 52.84M | 46.78M | 32.52M | 26.98M | 24.34M | EBIT |
| -3.62M | -1.24M | -1.41M | -4.07M | -4.29M | 1.59M | EBITDA |
| 3.80M | 9.17M | 7.75M | 4.11M | 6.88M | 6.58M | Net Income Common Stockholders |
| -1.46M | -2.72M | 6.38M | -4.43M | 1.23M | 1.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 10.22M | 5.70M | 10.48M | 15.64M | 16.04M | 24.55M | Total Assets |
| 47.12M | 138.71M | 122.75M | 72.30M | 66.32M | 60.57M | Total Debt |
| 0.00 | 8.54M | 3.42M | 2.42M | 945.00K | 302.00K | Net Debt |
| -10.22M | 2.84M | -7.06M | -13.21M | -15.10M | -24.25M | Total Liabilities |
| 29.97M | 63.95M | 61.80M | 38.49M | 32.02M | 33.32M | Stockholders Equity |
| 17.15M | 74.76M | 60.95M | 33.81M | 34.30M | 27.25M |
| Cash Flow | Free Cash Flow | ||||
| 17.73M | 5.90M | 1.26M | 1.92M | 7.08M | 8.78M | Operating Cash Flow |
| 23.39M | 10.95M | 12.18M | 9.82M | 11.21M | 13.69M | Investing Cash Flow |
| -5.77M | -16.48M | -15.54M | -7.88M | -18.76M | -4.91M | Financing Cash Flow |
| -8.24M | 795.00K | -1.75M | -2.27M | -956.00K | 5.48M |
SoundThinking Inc Technical Analysis
Positive
15.37
Price Trends
13.95
Positive
13.00
Positive
13.22
Positive
Market Momentum
0.57
Positive
54.16
Neutral
45.25
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SSTI, the sentiment is Positive. The current price of 15.37 is above the 20-day moving average (MA) of 15.09, above the 50-day MA of 13.95, and above the 200-day MA of 13.22, indicating a bullish trend. The MACD of 0.57 indicates Positive momentum. The RSI at 54.16 is Neutral, neither overbought nor oversold. The STOCH value of 45.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $40.35B | 110.21 | 19.10% | ― | 33.32% | 111.64% | |
71 Outperform | $192.73M | ― | -12.48% | ― | 19.39% | 81.08% | |
67 Neutral | $6.25B | 28.03 | 9.99% | ― | 24.03% | 43.75% | |
58 Neutral | $21.35B | 10.05 | -19.26% | 2.35% | 5.02% | -22.63% | |
47 Neutral | $104.35M | ― | 226.54% | ― | -13.43% | 15.63% | |
32 Underperform | $58.93M | ― | -46.07% | ― | -11.65% | -1042.58% |
* Technology Sector Average
Performance Comparison
SSTI
SoundThinking Inc
15.37
-0.83
-5.12%
CMTL
Comtech Telecommunications
2.02
-2.17
-51.79%
AXON
Axon Enterprise
526.64
219.86
71.67%
VERI
Veritone
2.36
0.19
8.76%
PSN
Parsons
57.58
-24.87
-30.16%
SoundThinking Inc Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 12.35% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call reflects both positive momentum in terms of full year revenue growth, international expansion, and successful contract renewals, alongside challenges such as a decline in Q4 revenue and increased net loss due to delayed contracts.Highlights
Full Year Revenue Growth
Full year 2024 revenue grew by 10% to a record $102 million, reflecting strong demand for public safety and security solutions.
International Expansion
ShotSpotter went live in 20 new cities and five new universities, with significant international expansion including new city captures in Niterói, Brazil, Nelson Mandela Bay, South Africa, and Montevideo, Uruguay.
NYPD Contract Renewal
Successfully executed a three-year contract renewal of approximately $21.9 million with NYPD, securing the ShotSpotter service through December 2027.
Net Promoter Score Improvement
Achieved a world-class net promoter score of 66%, moving up 200 basis points from last year's 64%.
Increased Revenue Guidance for 2025
Increased full year 2025 revenue guidance to $111 million to $113 million, representing approximately 10% year-over-year growth.
Lowlights
Q4 Revenue Decline
Q4 revenue decreased by 10% year-over-year to $23.4 million due to a $3.5 million delay in contract renewals with NYPD.
Increased Net Loss
Net loss for Q4 was approximately $4.1 million compared to a net income of $3.6 million in the prior-year period, impacted by delayed contracts.
Operating Expense Increase
Operating expenses increased 22% to $65.7 million or 64% of revenues for the year, compared to 58% of revenues in 2023.
Company Guidance
On SoundThinking's Fourth Quarter and Full Year 2024 Earnings Conference Call, CEO Ralph Clark and CFO Alan Stewart provided guidance for 2025, anticipating full-year revenue between $111 million and $113 million, representing a 10% year-over-year growth. They expect to achieve an adjusted EBITDA margin of 21% to 23%. Despite a 10% decrease in Q4 revenue year-over-year to $23.4 million, attributed to contract delays with the NYPD, the company reported a full-year revenue growth of 10%, reaching a record $102 million. SoundThinking's annual recurring revenue (ARR) entering 2025 is $95.6 million, and they have a $50 million ACV pipeline, with 62% being non-domestic. The company also highlighted a 105% revenue retention rate for 2024 and expects significant contributions from their SafetySmart platform and international expansion, particularly in Latin America and the Caribbean.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.