SoundHound AI Inc. (SOUN) PT Lowered to $18 at H.C. Wainwright

H.C. Wainwright analyst Scott Buck lowered the price target on SoundHound AI Inc. (NASDAQ: SOUN) to $18.00 (from $26.00) while maintaining a Buy rating.

The analyst commented: 'After the market close on May 8, SoundHound AI, Inc. released 1Q25 operating results, which included revenue of $29.1M, just below our $30.2M estimate and $30.4M for the Street. While revenue was shy of our estimate, the company reaffirmed its previously issued revenue guidance for 2025, which we believe should relieve some investor concern given an increasing level of macroeconomic uncertainty. However, given the company’s ability to drive efficiencies and cost savings for small and medium business customers, we believe potential macro headwinds could be a net positive, serving as a new business accelerant. While the numbers were just ok versus expectations, we believe several takeaways from the earnings call should drive increasing investor optimism. This includes a series of new customer announcements across multiple sectors suggesting further diversification in the business. In addition, the company’s restaurant business now exceeds 13,000 locations. At an estimated $200 per month, this would represent $31.2M of annual recurring revenue. Further, we believe the number of locations could potentially increase meaningfully over the remainder of 2025 and expect average monthly revenue to also increase over time as additional services are added. While we firmly believe the company can prove its ability to grow organically in 2025, $246.0M of available balance sheet cash should allow the company to be opportunistic in pursuing additional M&A. While remain optimistic, we have reduced our full year revenue estimate, acknowledging a higher level of macro uncertainty. As a result, our price target moves to $18 from $26. We remain Buy-rated."

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