Is now a good time to buy Soundhound stock.
11/25/2024 12:25am
**SoundHound AI appears to be a promising investment**, and several factors suggest it could be a good time to buy the stock:
1. **Strong Recent Performance**: SoundHound AI's stock has seen an 18.19% increase on November 22, 2024, indicating strong recent momentum.
|Ticker|Name|Date|Closing Price|Percentage Change|code|market_code|
|---|---|---|---|---|---|---|
|SOUN.O|SoundHound AI|20241122|8.25|18.1948|SOUN|185|
2. **Positive Market Sentiment**: The company's stock surge can be attributed to positive developments such as the successful handling of over 100,000 calls by its Amelia agents for Apivia Courtage, leading to a 20% reduction in human inquiries. This operational success has boosted investor confidence, driving the stock price up.
3. **Strategic Partnerships and Adoption**: The company's widespread adoption in fields such as restaurant order automation and the automobile market, along with its partnership with Apivia Courtage, suggest a growing user base and potential for revenue growth.
4. **Financial Projections**: SoundHound AI's revenue is expected to rise to $155 million to $175 million in 2025, with management guiding for positive earnings before interest, taxes, depreciation, and amortization (EBITDA) by the end of 2025. This indicates a promising growth trajectory.
5. **Valuation Considerations**: While the stock's P/E ratio is negative, this could be due to current losses, and the company's P/S ratio of 29 times sales is not out of place compared to other AI stocks. The price-to-sales ratio is a more direct indicator of how much investors are willing to pay for a company's sales, and 29 times sales is within the range of what other AI companies trade at.
|Ticker|Name|Date|P/E(TTM)|code|market_code|
|---|---|---|---|---|---|
|SOUN.O|SoundHound AI|20240102|-5.770429|SOUN|185|
|SOUN.O|SoundHound AI|20240103|-5.493004|SOUN|185|
|SOUN.O|SoundHound AI|20240104|-5.714944|SOUN|185|
|SOUN.O|SoundHound AI|20240105|-5.520746|SOUN|185|
|SOUN.O|SoundHound AI|20240108|-5.825913|SOUN|185|
|SOUN.O|SoundHound AI|20240109|-5.187837|SOUN|185|
|SOUN.O|SoundHound AI|20240110|-5.201708|SOUN|185|
|SOUN.O|SoundHound AI|20240111|-4.910413|SOUN|185|
|SOUN.O|SoundHound AI|20240112|-5.049125|SOUN|185|
|SOUN.O|SoundHound AI|20240116|-5.049125|SOUN|185|
|Ticker|Name|Date|Price to Book Ratio|code|market_code|
|---|---|---|---|---|---|
|SOUN.O|SoundHound AI|20240102|44.48700991251624|SOUN|185|
|SOUN.O|SoundHound AI|20240104|44.059250201818976|SOUN|185|
|SOUN.O|SoundHound AI|20240105|42.56209121437852|SOUN|185|
|SOUN.O|SoundHound AI|20240108|44.914769623213516|SOUN|185|
|SOUN.O|SoundHound AI|20240109|39.99553295019489|SOUN|185|
|SOUN.O|SoundHound AI|20240110|40.10247287786921|SOUN|185|
|SOUN.O|SoundHound AI|20240111|37.85673439670853|SOUN|185|
|SOUN.O|SoundHound AI|20240112|38.92613367345171|SOUN|185|
|SOUN.O|SoundHound AI|20240116|38.92613367345171|SOUN|185|
|SOUN.O|SoundHound AI|20240117|38.284494107405806|SOUN|185|
|Ticker|Name|Date|P/S|code|market_code|
|---|---|---|---|---|---|
|SOUN.O|SoundHound AI|20240102|13.409520889786256|SOUN|185|
|SOUN.O|SoundHound AI|20240103|12.764832385469608|SOUN|185|
|SOUN.O|SoundHound AI|20240104|13.280583188922925|SOUN|185|
|SOUN.O|SoundHound AI|20240105|12.829301235901273|SOUN|185|
|SOUN.O|SoundHound AI|20240108|13.538458590649585|SOUN|185|
|SOUN.O|SoundHound AI|20240109|12.055675030721298|SOUN|185|
|SOUN.O|SoundHound AI|20240110|12.08790945593713|SOUN|185|
|SOUN.O|SoundHound AI|20240111|11.41098652640465|SOUN|185|
|SOUN.O|SoundHound AI|20240112|11.733330778562973|SOUN|185|
|SOUN.O|SoundHound AI|20240116|11.733330778562973|SOUN|185|
6. **Institutional Confidence**: Nvidia's continued investment in SoundHound AI, with the prominent AI chip maker holding a stake in the company, reinforces confidence in SoundHound's potential.
However, it's important to consider the following:
1. **Premium Valuation**: The high valuation of SoundHound AI's stock presents a risk, as investors have high expectations. This could lead to volatility if the company does not meet these expectations.
2. **New and Susceptible Business Relationships**: Many of SoundHound's business relationships are new and could be susceptible to disruption. This could impact the company's performance and stock price.
In conclusion, while SoundHound AI shows potential for growth, it's important to weigh the positive market sentiment and financial projections against the risks associated with the company's premium valuation and new business relationships. Investors should consider their risk tolerance and investment horizon before making a decision.
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