SoundHound AI (NASDAQ:SOUN) Trading Down 7.8% After Earnings Miss

Shares of SoundHound AI, Inc. (NASDAQ:SOUN) fell 7.8% during mid-day trading on Friday following a weaker than expected earnings announcement. The stock traded as low as $8.35 and last traded at $8.88. 48,716,274 shares were traded during mid-day trading, an increase of 75% from the average session volume of 27,883,531 shares. The stock had previously closed at $9.63.

The company reported ($0.06) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.05) by ($0.01). SoundHound AI had a negative return on equity of 41.46% and a negative net margin of 91.84%.The business had revenue of $44.20 million for the quarter, compared to analyst estimates of $42.56 million. During the same quarter in the previous year, the firm posted ($0.06) EPS. The business’s revenue was up 51.7% on a year-over-year basis.

More SoundHound AI News

Here are the key news stories impacting SoundHound AI this week:

• Positive Sentiment: SoundHound posted record Q1 revenue of $44.2 million, up about 52% year over year, and exceeded revenue expectations, showing continued momentum in its voice AI business. SoundHound AI Reports Record Q1 Revenue of $44.2 Million, Up 52%
• Positive Sentiment: The company launched OASYS, a self-learning AI agent platform, which could expand SoundHound’s product offering and support longer-term growth. SoundHound AI (SOUN) Launches OASYS Self-Learning AI Agent Platform
• Positive Sentiment: SoundHound outlined 2027 revenue expectations of at least $350 million to $400 million after the planned LivePerson acquisition, suggesting management sees meaningful future scale. SoundHound outlines 2027 revenue of at minimum $350M-$400M following planned LivePerson acquisition
• Neutral Sentiment: Analysts remain broadly constructive, with at least one recent upgrade to strong-buy and commentary that the stock could have meaningful upside if execution improves. Wall Street Bulls Look Optimistic About SoundHound AI (SOUN): Should You Buy?
• Negative Sentiment: Despite the revenue beat, SoundHound missed earnings estimates and cited higher acquisition-related costs and vendor true-ups, which pressured margins and weighed on investor sentiment. SOUN Q1 Earnings Miss on Higher Costs, Revenue Beat, Stock Down
• Negative Sentiment: Investors also appear concerned that the planned LivePerson deal and broader acquisition strategy could continue to pressure earnings even as revenue grows. SoundHound’s stock falls as acquisitions weigh on earnings results

Wall Street Analyst Weigh In

Several equities analysts have weighed in on SOUN shares. LADENBURG THALM/SH SH raised SoundHound AI to a “strong-buy” rating in a research report on Wednesday. HC Wainwright dropped their price objective on SoundHound AI from $26.00 to $20.00 and set a “buy” rating for the company in a research report on Monday, March 2nd. Zacks Research upgraded shares of SoundHound AI from a “strong sell” rating to a “hold” rating in a report on Monday, February 9th. DA Davidson reaffirmed a “buy” rating and set a $14.00 price target on shares of SoundHound AI in a research note on Wednesday, April 22nd. Finally, Piper Sandler reiterated a “neutral” rating and set a $9.00 price target (down from $11.00) on shares of SoundHound AI in a report on Friday, February 27th. One equities research analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating, three have given a Hold rating and one has given a Sell rating to the company’s stock. According to MarketBeat.com, SoundHound AI presently has an average rating of “Moderate Buy” and a consensus price target of $14.93.

Insider Buying and Selling at SoundHound AI

In related news, CEO Keyvan Mohajer sold 124,510 shares of the firm’s stock in a transaction that occurred on Friday, March 20th. The shares were sold at an average price of $6.79, for a total value of $845,422.90. Following the sale, the chief executive officer directly owned 2,073,777 shares of the company’s stock, valued at approximately $14,080,945.83. This trade represents a 5.66% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, COO Michael Zagorsek sold 52,968 shares of the company’s stock in a transaction that occurred on Friday, March 20th. The stock was sold at an average price of $6.79, for a total transaction of $359,652.72. Following the transaction, the chief operating officer directly owned 1,734,491 shares of the company’s stock, valued at $11,777,193.89. This trade represents a 2.96% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last 90 days, insiders sold 307,973 shares of company stock worth $2,091,110. 8.84% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. PNC Financial Services Group Inc. increased its stake in SoundHound AI by 100.3% during the first quarter. PNC Financial Services Group Inc. now owns 17,193 shares of the company’s stock worth $118,000 after acquiring an additional 8,610 shares during the last quarter. Hollencrest Capital Management lifted its stake in shares of SoundHound AI by 197.5% in the 1st quarter. Hollencrest Capital Management now owns 3,615 shares of the company’s stock valued at $25,000 after purchasing an additional 2,400 shares in the last quarter. AlphaCentric Advisors LLC lifted its stake in shares of SoundHound AI by 20.0% in the 1st quarter. AlphaCentric Advisors LLC now owns 75,000 shares of the company’s stock valued at $515,000 after purchasing an additional 12,500 shares in the last quarter. SEB Asset Management AB purchased a new stake in shares of SoundHound AI during the 1st quarter worth about $249,000. Finally, Swiss National Bank increased its position in SoundHound AI by 3.7% during the 1st quarter. Swiss National Bank now owns 767,100 shares of the company’s stock worth $5,270,000 after purchasing an additional 27,300 shares in the last quarter. Institutional investors and hedge funds own 19.28% of the company’s stock.

SoundHound AI Price Performance

The company has a market cap of $3.75 billion, a price-to-earnings ratio of -18.89 and a beta of 2.58. The firm’s 50-day moving average price is $7.57 and its 200-day moving average price is $10.18.

About SoundHound AI

SoundHound AI, Inc is a voice AI and conversational intelligence company specializing in speech recognition, natural language understanding and sound identification technologies. Founded in 2005 and headquartered in Santa Clara, California, the company initially gained recognition with its music discovery app before pivoting to enterprise-grade voice AI solutions. Over the years, SoundHound AI has built a comprehensive platform that enables developers and businesses to embed conversational intelligence into a wide range of products and services.

The company’s core offering is the Houndify voice AI platform, which provides customizable speech-to-meaning technology, domain-specific natural language understanding and text-to-speech capabilities.