Soundhound Ai, Inc. (NASDAQ: SOUN)

Sector: Technology Industry: Software - Application CIK: 0001840856
Market Cap 4.14 Bn
P/B 10.36
P/E -13.20
P/S 27.88
ROIC (Qtr) -80.50
Div Yield % 0.00
Rev 1y % (Qtr) 67.57
Total Debt (Qtr) 4.82 Mn
Debt/Equity (Qtr) 0.01

About

SOUNDHOUND AI, INC., with ticker symbol SOUN, operates in the conversational intelligence industry. The company is a global leader in Voice AI solutions, enabling businesses to deliver high-quality conversational experiences to their customers through an independent AI platform. SoundHound's mission is to voice-enable the world, allowing humans to interact with products and services like they do with each other - naturally. The company's main business activities revolve around developing and licensing its proprietary Voice AI technology. This technology...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 268.94M provide 114.98x coverage of short-term debt 2.34M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 388.87M provides 80.66x coverage of total debt 4.82M, indicating robust asset backing and low credit risk.
  • Tangible assets of 388.87M provide exceptional 13.67x coverage of deferred revenue 28.45M, showing strong service capability backing.
  • Strong free cash flow of (111.90M) provides 2.05x coverage of acquisition spending (54.60M), indicating disciplined M&A strategy.
  • Tangible assets of 388.87M provide robust 6.95x coverage of other current liabilities 55.93M, indicating strong asset backing.

Bear case

  • Investment activities of (57.05M) provide weak support for R&D spending of 93.80M, which is -0.61x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 268.94M provide limited coverage of acquisition spending of (54.60M), which is -4.93x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of (109.46M) provides insufficient coverage of deferred revenue obligations of 28.45M, which is -3.85x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (109.46M) shows concerning coverage of stock compensation expenses of 70.81M, with a -1.55 ratio indicating potential earnings quality issues.
  • Free cash flow of (111.90M) provides weak coverage of capital expenditures of 2.44M, with a -45.81 ratio suggesting additional external financing needs for growth initiatives.

Geographical Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 288.31 Bn 34.60 6.72 10.73 Bn
2 CRM Salesforce, Inc. 248.32 Bn 34.38 6.16 11.14 Bn
3 SHOP Shopify Inc. 212.27 Bn 119.19 19.85 1.12 Bn
4 INTU Intuit Inc. 180.73 Bn 43.89 9.30 6.78 Bn
5 UBER Uber Technologies, Inc 178.38 Bn 10.72 3.60 12.19 Bn
6 NOW ServiceNow, Inc. 146.98 Bn 84.91 11.60 2.40 Bn
7 ADBE Adobe Inc. 144.48 Bn 20.77 6.23 6.64 Bn
8 ADP Automatic Data Processing Inc 108.20 Bn 26.16 5.18 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 5.57 2.65
EV to Cash from Ops. EV/CFO -35.73 13.37
EV to Debt EV to Debt 811.28 57.69
EV to EBIT EV/EBIT -12.70 19.12
EV to EBITDA EV/EBITDA -14.31 15.00
EV to Free Cash Flow [EV/FCF] EV/FCF -34.95 14.69
EV to Market Cap EV to Market Cap 0.95 -92.28
EV to Revenue EV/Rev 26.36 4.60
Price to Book Value [P/B] P/B 10.36 4.26
Price to Earnings [P/E] P/E -13.20 -136.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -444.49 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.52
Interest Coverage Int. cover (Qtr) -165.03 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -295.31 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 98.32 9,763.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -227.60 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -267.10 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) -202.75 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) -162.48 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) -147.22 123.84
FCF Growth (1y) % FCF 1y % (Qtr) -24.00 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 44.44 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.21 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 4.13 3.75
Current Ratio Curr Ratio (Qtr) 5.15 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 0.17
Interest Cover Ratio Int Coverage (Qtr) -165.03 -52.32
Times Interest Earned Times Interest Earned (Qtr) -165.03 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -184.20 -100.06
EBIT Margin % EBIT Margin % (Qtr) -207.51 -164.24
EBT Margin % EBT Margin % (Qtr) -208.77 -116.94
Gross Margin % Gross Margin % (Qtr) 39.70 58.20
Net Profit Margin % Net Margin % (Qtr) -211.20 -121.65