SoundHound Ai and voice AI
Company $SOUN+3.3% is known for its focus on conversational artificial intelligence, particularly in the area of voice recognition and intelligent voice assistants. While its technology is gaining attention and support on Wall Street, the company's financial results remain mixed. Revenues may be growing, but the pace of growth is slowing, and despite many promising partnerships and acquisitions, SoundHound has still failed to turn a profit.
Financial situation
In Q2 2024, $SOUN+3.3% reported that its revenue grew 54%, which is solid growth, but the growth rate is slowing compared to prior periods (e.g., 80% in Q4 2023 and 72% in Q1 2024). In addition, its net loss increased, reaching USD 37.3 million, an increase of 60% compared to the previous year. Even though the adjusted loss has decreased to $14.8 million, the company is still reporting a loss, a problem that has persisted for more than a decade.
Positive aspects and partnerships
Although $SOUN+3.3% is not making a profit, its technology is gaining widespread adoption. Its voice AI is implemented in more than 10,000 restaurants in the United States, including well-known chains like Chipotle, White Castle, Panda Express, and others. The company has also forged major partnerships with automakers like Stellantis, and has extended its technology into vehicles from Peugeot, Opel, and Alfa Romeo.
$SOUN+3.3% is also expanding its reach with acquisitions such as Allset and Amelia, which strengthen its presence in online ordering and conversational AI for customer support.
Analyst Ratings
There is optimismon Wall Street about $SOUN+3.3%. Several analysts have raised their target prices for SOUN stock, with Cantor Fitzgerald, for example, raising its target price from $5 to $7 per share. Other analysts, such as Northland Securities and H.C. Wainwright, also reiterated their positive outlook on the company's stock.
Risks and challenges
Despite these positives, significant risks remain. $SOUN+3.3% is still struggling with losses and slowing revenue growth. Moreover, while its technology is finding applications in various industries such as restaurants and automobiles, it is unclear whether these investments will translate into profits anytime soon.
An investment in SoundHound AI stock may be of interest to those investors who have a high tolerance for risk and believe in the company's long-term potential. For more conservative investors, it may be more prudent to wait until the company becomes profitable. SoundHound AI has the potential to become a major player in conversational AI, but the road to profitability is likely to be long and fraught with challenges.
Why is it that they have so little, in fact almost no, debt? Are they taking money from investors? That would make the most sense to me.