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SoundHound AI Inc (NASDAQ:SOUN) shares tanked in early trading on Friday, despite the company reporting upbeat second-quarter results.
The results came amid an exciting earnings season. Here are some key analyst takeaways.
Analyst Brett Knoblauch upgraded the rating from Neutral to Overweight, while raising the price target from $5 to $7.
SoundHound AI reported "solid" results for the second quarter, with revenue of $13.5 million coming in slightly higher than expected, Knoblauch said in a note.
Management raised its full-year revenue guide to at least $80 million and introduced a 2025 target of $150 million, "primarily related to today’s acquisition of Amelia, an enterprise AI software company," he added.
This could be a "transformative acquisition" for the company, as it brings "a very high profile customer base," significant recurring revenues, and "a sizable sales force that SOUN can rely upon to meet what it characterizes as overwhelming demand," the analyst wrote. The acquisition was attractively priced for SoundHound AI, he further stated.
Check out other analyst stock ratings.
Analyst Daniel Ives reiterated an Outperform rating and price target of $9.
SoundHound AI delivered revenue and earnings beats, as it "continues to see demand for its voice AI products pick up across its automotive and restaurant segments, signing various large brand deals fueling growth while grabbing market share in the conversational AI market," Ives said.
The company also announced plans to acquire Amelia for $80 million in cash and equity, "an enterprise AI software company which has $45+ million in recurring AI software revenue that will improve SOUN's position within voice and conversational AI while expanding into new verticals such as retail, financial services, healthcare, smart devices, and more," the analyst wrote.
Following the deal, SoundHound AI raised its full-year revenue guidance from $65.0 million-$77.0 million to $80.0 million, he added.
Analyst Gil Luria maintained a Buy rating and price target of $9.50.
SoundHound AI reported revenues of $13.5 million, representing 54% year-on-year growth, Luria said. "Interest in SoundHound’s solution from large global brands remains profound," he added.
The acquisition of Amelia is a "transformative deal," as it improves SoundHound AI's position in the customer service space beyond restaurants, the analyst stated.
"We are confident in management’s ability to effectively integrate Amelia and see significant benefits from its deep customer relationships across industries and supplemental technology," he further wrote.
SOUN Price Action: Shares of SoundHound AI had declined by 4.61% to $4.97 at the time of publication on Friday.
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Posted In: SOUN
