SoundHound AI, Inc. (NASDAQ: SOUN) has emerged as one of the most heavily searched stocks on Zacks.com, drawing significant attention from retail and institutional investors alike.
Shares of the voice AI company have declined 20.4% over the past month, a stark contrast to the Zacks S&P 500 composite’s gain of 1.5% over the same period.
The broader Zacks Computers – IT Services industry, within which SoundHound AI is classified, managed a gain of 2.4% during that same timeframe, widening the gap between SOUN and its sector peers.
Earnings estimate revisions are widely regarded as one of the most reliable indicators of near-term stock price direction, and the picture for SoundHound AI remains under pressure.
For the current quarter, the company is expected to post a loss of $0.07 per share, representing a year-over-year deterioration of 133.3%, with the Zacks Consensus Estimate holding unchanged over the last 30 days.
The consensus earnings estimate for the current fiscal year stands at -$0.19 per share, reflecting a year-over-year change of -46.2%, and that figure has also remained flat over the past month.
Looking further ahead, the next fiscal year consensus earnings estimate of $0.14 per share implies a change of +24.6% from current-year expectations, and that estimate has moved higher by 30.3% over the past month.
Despite the longer-term earnings optimism, SoundHound AI currently holds a Zacks Rank of #4, which carries a Sell designation and suggests the stock may underperform the broader market in the near term.
On the revenue side, the consensus sales estimate of $63.02 million for the current quarter points to year-over-year growth of 49.9%, while full-year estimates of $241.12 million and $334.44 million imply growth of 42.7% and 38.7% for the current and next fiscal years, respectively.
SoundHound AI reported revenues of $61.9 million in its last reported quarter, representing year-over-year growth of 45%, and delivered an EPS of -$0.02 compared to -$0.03 in the same period a year prior.
Those results came in well ahead of expectations, with revenues beating the Zacks Consensus Estimate of $52.49 million by 17.92%, while the EPS result delivered a positive surprise of 33.33%.
Over the last four quarters, the company surpassed consensus EPS estimates on two occasions and topped consensus revenue estimates in each of the four periods.
Valuation remains a notable concern, with SoundHound AI receiving a grade of F under the Zacks Value Style Score system, indicating the stock is trading at a significant premium relative to its peers.
The combination of a Sell-rated Zacks Rank, a premium valuation grade, and a sharp one-month price decline presents a challenging short-term outlook for investors currently tracking the stock.
