SoundHound AI: Buy, Sell, or Hold SOUN Stock At $10?
CHONGQING, CHINA - FEBRUARY 23: In this photo illustration, the SoundHound AI logo is displayed on a ... More smartphone screen, with the company's latest stock market performance and candlestick charts visible in the background, highlighting SoundHound AI's real-time financial trends, stock price fluctuations, market volatility, and investment developments within the artificial intelligence, voice recognition, and technology sectors, on February 23, 2025 in Chongqing, China. (Photo by)
SoundHound AI (NASDAQ:SOUN), a voice AI platform empowering businesses with conversational AI experiences, has recently experienced a significant stock decline, plummeting over 50% year-to-date to $10. A substantial portion of this drop occurred in January, largely due to disappointed investor expectations following the Consumer Electronics Show (CES). The stock has yet to see a meaningful recovery since then.
From a valuation perspective, SoundHound AI stock still appears overpriced. We believe there are several factors contributing to this unattractiveness, especially when considering its current high valuation. Our conclusion is based on a comprehensive comparison of SOUN's current valuation against its recent operating performance and its current and historical financial health.
Our in-depth analysis of SoundHound AI, covering key parameters such as Growth, Profitability, Financial Stability, and Downturn Resilience, indicates that the company has demonstrated only moderate operating performance and financial condition. These factors collectively raise concerns about the stock's current appeal. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative - having outperformed the S&P 500 and generated returns exceeding 91% since its inception. On a separate note, see – Should You Buy CRWV Stock After A Whopping 4x Rise?
Going by what you pay per dollar of sales or profit, SOUN stock looks very expensive compared to the broader market.
SoundHound AI's Revenues have grown considerably over recent years.
SoundHound AI's profit margins are considerably worse than most companies in the Trefis coverage universe.
SoundHound AI's balance sheet looks very strong.
SOUN stock has fared much worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
In summary, SoundHound AI's performance across the parameters detailed above are as follows:
• Growth: Extremely Strong
• Profitability: Extremely Weak
• Financial Stability: Extremely Strong
• Downturn Resilience: Extremely Weak
• Overall: Neutral
Even though SoundHound AI shows a neutral performance in the areas we analyzed, its extremely high valuation makes the stock unattractive, in our view.
Of course, we could be wrong; investors might be willing to pay such a high valuation multiple for SOUN stock given its aggressive revenue growth, supported by its Amelia acquisition. However, the risk at these levels appears high. In fact, we apply risk assessment framework while constructing Trefis High Quality (HQ) Portfolio which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
29 minutes ago
- Yahoo
Investors should consider this growth stock… it's SpaceX's competition
Rocket Lab (NASDAQ:RKLB) is a US-listed growth stock that gives investors rare access to the commercial space sector. As a vertically integrated launch and space systems provider, Rocket Lab is often compared to SpaceX in its ambition and capabilities. But there's one crucial difference: you can actually buy shares in Rocket Lab, while SpaceX remains private. Rocket Lab delivers launch services, builds small and medium-class rockets, and manufactures spacecraft components for a range of commercial, government, and defense customers. With rapid revenue growth, an impressive order book, and expansion into new markets, Rocket Lab offers public market investors a way to participate in the booming space economy. It targets many of the same opportunities as its more famous, privately held peer. Rocket Lab and SpaceX operate in the same commercial space sector but differ significantly in scale, maturity, and valuation. Rocket Lab's market cap is currently $12.85bn, with trailing 12 months (TTM) revenue of approximately $460m. Despite strong growth — revenue nearly doubled from $240m in 2023 — Rocket Lab remains a smaller, earlier-stage player focused on small to medium launch vehicles and spacecraft manufacturing. Its valuation multiples are extremely high, with a forward price-to-sales ratio of 22.3 times, reflecting investor optimism. SpaceX, by contrast, is a far more mature private company valued at about $350bn. It's projected to generate $15.5bn in revenue in 2025. This is driven by its dominant Falcon 9 launch services and rapidly growing Starlink satellite internet business. SpaceX's valuation implies roughly a 22.5 times multiple on forward revenue. This is broadly in line with Rocket Lab. Focusing on Rocket Lab, the company is projected to deliver rapid revenue growth over the next several years, with estimates rising from $573m in 2025 to $889 in 2026, $1.2bn in 2027, and $1.69bn in 2028. This represents annual growth rates consistently above 30%, and even a jump of nearly 77% in 2030. However, the number of analysts providing forecasts declines sharply after 2027, dropping from 11–14 analysts in the near term to just two or one by 2028 and 2030. The one analyst projecting as far as 2030 sees $4bn in revenue for the year. I had the chance to buy Rocket Lab shares at $15 just two months ago. I missed out as unfortunately my attention had been diverted elsewhere. However, I found another entry point. And personally, I see this as an investment to hold for a very long period. The space industry is still in its early innings, with enormous potential as satellite launches, lunar missions, and in-orbit services become increasingly mainstream. And like any investment, there are risks. Rocket Lab remains loss-making. It's expected to turn a profit in 2026, when it will trade at 620 times earnings. And while this moderates to 140 times in 2027, it's still expensive and introduces plenty of execution risk. However, I certainly believe UK investors should consider this one. It could be a real winner going forward. The post Investors should consider this growth stock… it's SpaceX's competition appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool James Fox has positions in Rocket Lab. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
Yahoo
39 minutes ago
- Yahoo
Taiwan central bank says US debt rising too fast may impact trust in Treasuries
TAIPEI (Reuters) -Taiwan's central bank governor warned on Saturday that rapidly rising U.S. debt could be "unfavourable" to the outlook for U.S. Treasuries and that U.S. President Donald Trump's trade policies have made investors cautious. Taiwan's $593 billion in foreign exchange reserves are more than 80% made up of U.S. Treasury bonds, according to the central bank, which said earlier this month that Treasuries were "sound" and still favoured by investors. It added there were no worries about the dollar's position as the leading international reserve currency. Governor Yang Chin-long, in a speech posted on the central bank's website, said Trump's repeated criticisms of the U.S. Federal Reserve's monetary policy have caused concerns about its independence. "In addition, Trump 2.0's trade policy has made investors hesitant about holding U.S. Treasury bonds; Trump's budget, the 'One Big Beautiful Bill Act,' may cause U.S. debt to expand too quickly, which is unfavourable to the outlook for U.S. sovereign debt," he said. "All of these have had a significant impact on the international monetary system centred on the U.S. dollar and based on U.S. creditworthiness." Trump's sweeping tax-cut and spending bill is the centerpiece of his domestic agenda. The bill would lead to a larger-than-expected $2.8 trillion increase in the federal deficit over the decade, despite a boost to U.S. economic output, the nonpartisan Congressional Budget Office projected on Tuesday. Trump, in his first few weeks in office, also announced sweeping tariffs on a broad swathe of countries and trading partners, including Taiwan, only to pause them for 90 days in April to allow for talks to take place. Yang said Trump had been hoping the tariffs could resolve the U.S. trade deficit. "However, the tariff policy not only fails to solve the structural problems, it will also impact the U.S. economy, and threaten to further affect the outlook for global trade and the economy." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
The Country That Produces The Most Onions In The World
Onions might not seem like a hot commodity, but they're one of the most essential ingredients in kitchens around the world. Stir-fries, curries, stews, sauces — you name it, and onions are probably in it. So it makes sense that several countries grow them in massive quantities to meet nonstop demand. But here's the twist: The country that produces the most onions in the world isn't the United States, and it's not China either. It's India. According to World Population Review, India grew 37.1 million metric tons of onions in 2022 — more than any other nation on Earth. For scale, that's nearly 82 billion pounds of onions. That's a staggering figure, and while some of those onions are exported, most stay right at home. In a country of over a billion people, where onions form the base of everything from chana masala to crispy onion bhajis, it's easy to see why demand is sky-high. To meet that kind of year-round need, onions in India are grown in three waves — with the spring harvest, known as the Rabi crop, being the most important. These onions are stored and gradually sold to keep supply stable, especially during months when fresh harvests aren't available. It's a delicate system, and when it runs smoothly, onions stay affordable. But when it doesn't, prices can spiral out of control quickly. Read more: 13 International Dining Etiquette Rules We Should All Be Following India's title as the world's largest onion producer wouldn't be possible without two key states: Maharashtra and Madhya Pradesh. Located in central and western India, they account for over half of the country's total onion output. Maharashtra, in particular, is home to Lasalgaon, Asia's largest onion market — a place where prices don't just reflect supply and demand, but often set the tone for the entire nation. But large harvests don't always guarantee stability. Despite strong yields, onion prices in India often swing sharply due to weather, storage issues, or shifts in supply. And because onions are deeply woven into Indian culture — from rural farms to urban kitchens — price spikes are more than just an inconvenience. They hit millions of households where it hurts, making onion prices a political issue. A failed crop or poor storage season can spark protests, backlash, and even shifts in government policy. In recent years, the central government has imposed export bans to protect domestic supply and released emergency stocks from buffer reserves — a move typically reserved for essentials like rice or wheat. In India, onions don't just flavor the food — they shape public sentiment. When the onion market sneezes, the whole country catches a cold. And that's exactly what makes being the world's top producer not just a point of pride, but also a heavy responsibility. Read the original article on Tasting Table.
