SoundHound AI Inc.

SoundHound AI Inc. (NASDAQ: SOUN) is a pioneer in conversational intelligence, providing a standalone Voice AI platform that empowers businesses in various sectors to provide top-notch conversational interactions to their customers.

Recent Financial and Business Updates:

• Second Quarter Income Statement Review:
  • Reported revenue reached USD 8.8 million, marking a 42% increase compared to the previous year.
  • Gross margin stood at 79%, reflecting a notable improvement of around 1,900 basis points in comparison to the prior year's 60%.
  • The operating loss amounted to USD 16.4 million, showing a 43% year-over-year improvement.
  • The net loss totalled USD 21.9 million, which is a 28% year-over-year improvement.
  • Earnings per share resulted in a net loss of USD0.10, a positive change from USD 0.19 in the preceding year.
  • Reported an adjusted EBITDA (non-GAAP) loss of USD 9.9 million, signifying a 50% year-over-year improvement.
• Balance Sheet Review:
  • As of June 30, 2023, the company held around USD 130 million in total cash.
  • In April, SoundHound obtained USD 100 million in debt financing with minimal dilution.
  • During the second quarter, the company successfully raised USD 43 million through its dedicated equity facility.
  • The net change in cash and cash equivalents for the six months ended June 30, 2023 was USD 120.06 million.
• Partnership Update:
  • SoundHound AI, Inc., in collaboration with Samsung Electronics, has revealed a partnership with White Castle, the original fast-food hamburger chain in America. They will jointly implement cutting-edge, voice-activated outdoor digital signage technologies, aiming to transform the way brands engage with consumers.
  • The company has announced its integration with Olo, a prominent provider of restaurant software as a service (SaaS). This integration means that its technology is now accessible to all the approximately 77,000 establishments that utilize Olo's solutions.
  • SoundHound White Castle unveiled a unique extension of their collaboration, aimed at providing an enhanced voice AI-powered drive-thru experience to restaurant patrons at various locations throughout the country.

Technical Observation (on the daily chart)

The Relative Strength Index (RSI) observed over a 14-day period registers at 39.69, consolidating near oversold zone and showing some recovery. This suggests the potential for a short-term uptick in momentum or a period of consolidation. Furthermore, the stock's current position is situated below both the 21-day Simple Moving Average (SMA) and the 50-day SMA, potentially acting as dynamic short-term resistance levels. The price is currently inside a range of USD 1.50-USD 2.10, with a breakout is possible in any direction. The direction it takes will play a pivotal role in shaping the stock's short to medium-term prospects.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a “WATCH” rating is recommended for SoundHound AI Inc. (NASDAQ: SOUN) at the price of USD 1.77 as on October 19, 2023.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.

How to Read the Charts?

The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

The reference date for all price data, currency, technical indicators, support, and resistance levels is October 19, 2023. The reference data in this report has been partly sourced from REFINITIV.

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

Disclaimer

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