In a report released today, Scott Buck from H.C. Wainwright reiterated a Buy rating on SoundHound AI, Inc Class A (SOUN – Research Report), with a price target of $5.00.
Scott Buck’s Buy rating for SoundHound AI, Inc Class A is based on a variety of factors. First and foremost, SoundHound’s third-quarter earnings for 2023 outperformed projections, indicating progress towards profitability and revealing positive momentum in their business. The company reported revenues of $13.3 million, surpassing the estimated $11.3 million. Equally significant, SoundHound maintained its target for achieving a breakeven adjusted EBITDA by the fourth quarter of 2023, a major improvement compared to the $18.6 million loss in the fourth quarter of 2022. The journey to profitability is facilitated by increasing revenues and a greater level of cost discipline, resulting in a 32% YoY decline in operating expenses.
Additionally, Buck is optimistic about the company’s future revenue growth in 2024, particularly due to the potential of channel partnerships in the restaurant industry. For instance, the recent partnership with Olo, Inc. offers access to 77,000 merchants. The recurring revenue from these partnerships is likely to have a higher margin, which in turn could improve overall operating leverage as revenue keeps expanding. Buck also anticipates more partnership and enterprise contract announcements as potential catalysts for the company. As SoundHound continues to execute its current strategy and move towards profitability, the company’s undervalued shares are expected to attract new investors. Thus, Buck maintains a Buy rating for the company with a $5 price target.
In another report released today, Cantor Fitzgerald also reiterated a Buy rating on the stock with a $3.60 price target.
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SoundHound AI, Inc Class A (SOUN) Company Description:
SoundHound AI Inc is an innovator of conversational intelligence, offering an independent Voice AI platform that enables businesses across industries to deliver high-quality conversational experiences to customers.
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