SoundHound Needs Big Year-End Push, Faces Execution Challenges

Although its risk-reward is fundamentally balanced, SoundHound AI Inc.'s SOUN execution in the back half of the year "could create a squeeze on shares," according to Piper Sandler.

The SoundHound AI Analyst: Analyst James Fish downgraded the rating from Overweight to Neutral, while establishing a price target of $12.

The SoundHound AI Thesis: To meet its full-year guidance, the company needs a large ramp in the latter half of the year, which is challenging given the current environment, Fish said in the downgrade note.

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While SoundHound AI has a very large market and its business is shifting fast towards the subscription model, there have been limited responses for standalone Voice AI vendors, the analyst stated.

A lot of customers are in the testing, rather than implementing, phase, which "could signal AI push-outs," he added.

The company needs to make investments in its Amelia platform, which makes achieving profitability very challenging, Fish added.

SOUN Price Action: SoundHound AI shares were down 4.32% at $11.07 at the time of publication on Monday, according to Benzinga Pro.

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