2024-05-23 15:25:50 ET
Summary
- SoundHound AI develops voice AI solutions for various industries and is experiencing exponential sales growth.
- The company's rising sales are accompanied by a significant increase in COGS, which leads to growing operating losses and negative EPS.
- SoundHound's valuation is high based on its forwarding sales figures, and there are concerns about future dilution and unrealistic break-even expectations.
- The stock is down about 43% from its local highs, creating favorable conditions for those looking to buy it on a dip. This potential FOMO could only make SoundHound more expensive and unstable as an investment in the long run.
- The possible FOMO poses a risk to short sellers and leads me to rate SOUN as 'Hold' today.
The Company And Its Financials
According to Seeking Alpha's description, SoundHound AI, Inc. ( SOUN ), a California-based $1.67-billion market cap firm, develops voice AI solutions for various industries including automotive, TV, IoT, and customer service. Their products include the Houndify platform, which offers tools for building voice assistants, and SoundHound Chat AI, which integrates real-time data like weather and sports. They also provide SoundHound Smart Answering for custom AI-powered voice assistance, CaiNET and CaiLAN software for improved query handling, and solutions like Dynamic Interaction, Smart Ordering, and Employee Assist. Below you can see how the company has developed from its foundation in 2005 until today (charts taken from the last IR presentation ):
SOUN's IR materials
Read the full article on Seeking Alpha
For further details see:
SoundHound AI: This Growth Story Has A Problem