American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

Three reasons why SoundHound’s 151% revenue surge isn’t as attractive as it sounds

by admin May 13, 2025
May 13, 2025
Three reasons why SoundHound’s 151% revenue surge isn’t as attractive as it sounds

SoundHound AI Inc. (NASDAQ: SOUN) rallied as much as 25% on Monday after reporting $29.1 million in revenue for its first financial quarter.

On the surface, the number looks exceptionally positive. After all, it translates to a more than 150% growth on a year-over-year basis.

However, a deeper dive into SOUN’s Q1 earnings suggests it shouldn’t be sufficient for investors to dive headfirst into SoundHound stock.

SoundHound’s organic growth remains behind the curtains

SoundHound’s first-quarter release confirms it’s growing at an unbelievably fast clip – but much of it is related to the acquisitions the company has made over the past year.

Overreliance on acquisitions for growth makes it incrementally more challenging for investors to gauge the “real” performance of a company.

Why? Because often, companies on a buying spree do not report their organic growth rates, which is also the case with SoundHound.

So, investors currently have minimal insight into how SOUN’s original products and services are performing.

There’s no way to know if the core business is thriving or stagnating.

That’s perhaps one of the reasons why H.C. Wainwright lowered its price target on SoundHound stock to $18 after the company’s Q1 earnings report.

SOUN continues to push back its profitability timeline

Another major concern with owning SOUN shares at current levels is a lack of profitability.

Originally, the voice AI platform set out to turn positive on an EBITDA (adjusted) basis in the final quarter of 2023.

Then last year, its management revised expectations, aiming for positive adjusted earnings before interest, taxes, depreciation, and amortization in 2025.

However, SoundHound’s adjusted EBITDA still stands at negative $22.2 million at writing.

So, one may question the company’s ability to achieve that milestone by the end of this year – and even if it does, a case can be made for it being related to the buyouts, especially of Amelia for $80 million in 2024.

Note that SoundHound stock does not currently pay a dividend, appears to be any more attractive either.

SoundHound stock faces intense competition in voice AI

Finally, SoundHound shares remain unattractive at the current, post-earnings elevated levels also because the Nasdaq-listed firm faces intense competition in the conversational AI.

Granted, the voice AI market is broadly expected to be massive. But remember that SOUN is up against the big tech names, including Amazon, Google, Apple, and even Microsoft, at least in the automotive segment.

These titans have a tonne of more cash to advance in conversational AI. Therefore, any competitive advantage that SoundHound may currently have could prove insufficient in maintaining the firm’s revenue growth and generating meaningful profits over the long term.  

Note that Wall Street currently has an average price target of $11.79 on the AI stock, which doesn’t represent a meaningful upside from here.

The post Three reasons why SoundHound’s 151% revenue surge isn’t as attractive as it sounds appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Asia markets open: Hang Seng plunges over 2% in tech sell-off, defying global relief rally
next post
Red alert: Axon stock price has formed a very risky pattern

Related Posts

Trump-linked memecoins TRUMP and MELANIA lose up to...

February 7, 2025

Barry Callebaut forecasts flat sales amid record-high cocoa...

November 6, 2024

Bitcoin approaches new all-time high after surpassing $65,000

March 5, 2024

Europe markets open: mixed start eyed as investors...

May 7, 2025

China will ‘move on’ with or without Nvidia...

May 29, 2025

Stocks tumble again as Trump’s tariff threats push...

March 14, 2025

Inflation vs. wages: How rising prices stack up...

June 28, 2024

What is the outlook of the iShares Russell...

February 3, 2025

Here’s why Zara’s Inditex share price is soaring

June 11, 2025

IBIT ETF stock forecast as Bitcoin price targets...

November 11, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Kraft Heinz plans breakup, weighs $20 billion grocery spin-off: report

      July 13, 2025
    • Trump’s 50% tariff on Brazil imports to brew trouble for Starbucks and Dutch Bros

      July 13, 2025
    • US to announce 30% tariff on EU and Mexico says Trump

      July 13, 2025
    • Why India is rushing to build bigger banks and what’s standing in the way

      July 13, 2025
    • Wall Street braces for weakest earnings season since 2023 amid market highs

      July 13, 2025

    Categories

    • Business (3,388)
    • Investing (2,615)
    • Latest News (2,017)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved