SoundHound AI: Wall Street Analysts Predict Doubling in Stock Price
SoundHound AI (NASDAQ: SOUN), a leading provider of artificial intelligence (AI) solutions for voice, has caught the attention of Wall Street analysts who predict that its stock price could double in the next year. Currently trading at around $2.10, SoundHound AI has garnered an average one-year price target of $5 from five analysts.
The company specializes in AI-powered voice solutions for various industries, with its primary customers being restaurants. From enabling mobile orders to operating drive-thru kiosks, SoundHound AI’s products have proven to be highly effective. In fact, its partnership with White Castle, a popular burger chain, has resulted in a 90% order completion rate and order processing in less than 60 seconds, surpassing the capabilities of human employees.
While SoundHound AI is already making waves in the restaurant industry, it is not resting on its laurels. The company recently announced the acquisition of SYNQ3, a move that will further expand its reach in the restaurant space and accelerate its growth. The acquisition will cost SoundHound AI approximately $25 million over the next three years, with funding coming from a combination of cash and stock.
Despite its promising prospects, potential investors should approach SoundHound AI with caution. The company is currently not profitable, and its operating loss in the third quarter amounted to $14.5 million. SoundHound AI has a cash burn rate of around $18.1 million per quarter, but it still has a cash balance of $110 million as of Q3, which can sustain its operations for a little over a year.
However, SoundHound AI has a significant backlog of $342 million on its books, indicating strong customer demand for its products. This backlog, along with its impressive revenue growth of 52% year over year, demonstrates that the company has products that customers want and serves as a positive sign for potential investors.
While investing in SoundHound AI holds promise, it is prudent to approach it with a small position due to the risks involved. If the company continues its upward trajectory and achieves substantial growth, even a small investment could yield significant returns.
In conclusion, SoundHound AI has garnered the attention of Wall Street analysts who foresee a doubling of its stock price in the next year. With its AI-powered voice solutions, particularly in the restaurant industry, SoundHound AI has the potential for exponential growth. However, investors should exercise caution given the company’s current lack of profitability and cash burn rate. By carefully evaluating the risks and rewards, investors can make an informed decision about SoundHound AI’s investment potential.
