SoundHound
SOUN
$6.43
-1.23%
SoundHound AI, Inc. is a technology company specializing in conversational intelligence, offering an independent Voice AI platform that enables businesses across industries to deliver high-quality conversational experiences. The company's products, including Smart Answering, Smart Ordering, Dynamic Drive-Thru, and Amelia AI Agents, serve sectors such as retail, financial services, healthcare, automotive, smart devices, and restaurants. SoundHound is a niche player in the voice AI space, differentiating itself through its independent platform and multilingual capabilities. The current investor narrative centers on the company's rapid revenue growth, the strategic acquisition of LivePerson to create an end-to-end omnichannel conversational AI platform, and concerns about ongoing losses, high valuation, and recent CFO departure, which have led to significant stock price volatility.…
SOUN
SoundHound
$6.43
Related headlines
Investment Opinion: Should I buy SOUN Today?
Rating: Hold. The consensus is Strong Buy with an average target of $13.14, implying 114% upside, but the fundamental and technical risks warrant caution. The thesis is that while growth is impressive, the margin compression and cash burn make the stock a speculative hold rather than a core position.
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SOUN 12-Month Price Forecast
The AI assessment is neutral, balancing strong growth with margin and profitability concerns. The stock's high beta and technical downtrend suggest near-term volatility, but the analyst targets imply significant upside if execution improves. Key factors to watch are gross margin recovery and revenue acceleration. If margins stabilize above 35% and growth remains above 50%, the stance would upgrade to bullish. Conversely, if margins deteriorate further or growth slows, the stance would turn bearish.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on SoundHound's 12-month outlook, with a consensus price target around $13.14 and implied upside of +104.4% versus the current price.
Average Target
$13.14
0 analysts
Implied Upside
+104.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$8 - $17
Analyst target range
SoundHound is covered by 7 analysts, with a consensus recommendation of 'Strong Buy' (mean rating of 1.29 on a 1-5 scale). The average target price is $13.14, implying an upside of approximately 114% from the current price of $6.13. The distribution includes 5 Buy ratings, 1 Outperform, and 1 Neutral, with no Sell ratings, indicating a bullish sentiment. The target price range spans from $8.00 (low) to $17.00 (high). The high target of $17 assumes successful integration of LivePerson and continued revenue acceleration, while the low target of $8 may reflect concerns about margin compression and competitive pressures. Recent ratings have been stable, with no downgrades, and the wide spread between low and high targets (112.5% difference) signals high uncertainty about the company's future performance.
Bulls vs Bears: SOUN Investment Factors
SoundHound presents a classic high-risk, high-reward scenario. The bull case rests on accelerating revenue growth (51.7% YoY), a strong analyst consensus (Strong Buy, 114% upside), and the transformative LivePerson acquisition. However, the bear case is equally compelling: persistent losses, a dramatic gross margin collapse to 20.2%, and a stock price down 40.7% over the past year. The most critical tension is whether the company can translate its top-line growth into sustainable profitability and margin recovery. If margins stabilize and the LivePerson integration delivers synergies, the stock could re-rate significantly; if not, the premium valuation (23.9x PS) leaves little room for error. Currently, the bearish technicals and margin compression weigh more heavily, but the analyst optimism and growth trajectory keep the bull case alive.
Bullish
- Revenue Growth Accelerating: Q1 2026 revenue surged 51.7% YoY to $44.2M, up from $29.1M in Q1 2025, demonstrating strong demand for voice AI solutions. The growth is broad-based across hosted services, licensing, and professional services.
- Analyst Consensus Strong Buy: 7 analysts rate SOUN a Strong Buy with a mean rating of 1.29, and the average price target of $13.14 implies 114% upside from the current $6.13. No sell ratings exist, reflecting bullish sentiment.
- LivePerson Acquisition Synergies: The acquisition of LivePerson creates an end-to-end omnichannel conversational AI platform, combining voice and digital messaging. This strategic move could accelerate revenue growth and expand market reach.
- Valuation Near Historical Low: The trailing PS ratio of 23.9x is near the lower end of its historical range (31.5x to 215.4x), suggesting the stock is relatively cheaper than its own past, potentially offering value if growth continues.
Bearish
- Persistent Losses and Negative Cash Flow: Q1 2026 net loss was $25.0M, and TTM free cash flow is -$108.7M. The company has not achieved sustained profitability, and cash burn remains a concern for long-term viability.
- Gross Margin Compression: Gross margin fell sharply from 47.9% in Q4 2025 to 20.2% in Q1 2026, a decline of 27.7 percentage points. This suggests pricing pressure or integration costs, which could erode profitability.
- Stock in Severe Downtrend: SOUN is down 40.7% over the past year and 42.2% YTD, trading near its 52-week low of $5.65. The stock has underperformed the S&P 500 by 58.8 percentage points over the past year.
- High Valuation vs. Industry: The trailing PS ratio of 23.9x is 139% above the software industry average of ~10x, implying the market expects exceptional growth. Any slowdown could trigger a sharp de-rating.
SOUN Technical Analysis
SoundHound's stock is in a pronounced downtrend, with the price at $6.13 as of July 31, 2026, reflecting a 40.66% decline over the past year. The stock is trading near the lower end of its 52-week range, at approximately 3.5% above the 52-week low of $5.65 and 72.3% below the 52-week high of $22.17. This positioning near the lows suggests a bearish sentiment, with the stock having lost substantial value, though it may also indicate a potential value opportunity if fundamentals improve. The 1-year price change of -40.66% contrasts sharply with the S&P 500's +18.19% gain, highlighting significant underperformance.
Beta
2.83
2.83x market volatility
Max Drawdown
-73.4%
Largest decline past year
52-Week Range
$6-$22
Price range past year
Annual Return
-42.4%
Cumulative gain past year
| Period | SOUN Return | S&P 500 |
|---|---|---|
| 1m | -7.6% | +2.5% |
| 3m | -33.2% | +5.2% |
| 6m | -24.9% | +11.5% |
| 1y | -42.4% | +22.6% |
| ytd | -39.3% | +12.9% |
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SOUN Fundamental Analysis
Revenue has grown strongly, with the most recent quarter (Q1 2026) reporting revenue of $44.195 million, a 51.72% year-over-year increase. This growth is a continuation of an accelerating trend, as revenue has increased from $13.462 million in Q2 2024 to $55.059 million in Q4 2025, though Q1 2026 saw a sequential decline from Q4 2025's $55.059 million. The growth is driven by hosted services, which contributed $32.009 million, followed by licensing at $7.683 million and professional services at $4.42 million. Despite the strong top-line growth, the company remains unprofitable, with a net loss of $25.028 million in Q1 2026, though this loss narrowed from the $109.271 million loss in Q3 2025. Gross margin was 20.15% in Q1 2026, down from 47.86% in Q4 2025, indicating margin compression, which is concerning for a software company.
Quarterly Revenue
$44195000.0B
2026-03
Revenue YoY Growth
+51.7%
YoY Comparison
Gross Margin
20.2%
Latest Quarter
Free Cash Flow
$-108666000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is SOUN Overvalued?
Given the negative net income, the price-to-sales (PS) ratio is the primary valuation metric. The trailing PS ratio is 23.93x, while the forward PS ratio is not directly provided but can be estimated from the market cap and estimated revenue of $266.9 million, implying a forward PS of approximately 15.1x. The gap between trailing and forward PS suggests the market expects significant revenue growth. Compared to the software industry average PS of around 10x, SoundHound trades at a substantial premium of approximately 139%. This premium may be justified by its high growth rate, but it also embeds high expectations. Historically, the PS ratio has ranged from 31.46x in Q4 2023 to 215.44x in Q4 2024, with the current 23.93x being near the lower end of that range, suggesting the stock is relatively cheaper than its own historical valuation, though still expensive on an absolute basis.
PE
-288.2x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
148.8x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are substantial. The company is unprofitable, with a Q1 2026 net loss of $25.0M and TTM free cash flow of -$108.7M, indicating a reliance on external funding. The gross margin collapse from 47.9% to 20.2% in one quarter is alarming, suggesting potential pricing pressure or integration costs that could persist. Revenue concentration is also a risk, as hosted services account for 72% of Q1 revenue, making the company vulnerable to client churn or market shifts. The negative operating margin of -13.8% and net margin of -8.3% underscore the lack of profitability, and the high beta of 2.81 amplifies sensitivity to market swings.