SSTI: Chicago RFP Renewal Will Drive Future Contract Momentum

Analysts modestly reduced their price target on SoundThinking to $14.00 from $19.00, citing recent top line weakness, near term contract uncertainty, and a tempered 2026 outlook, while still highlighting positive momentum in key RFP processes and the company’s strong strategic positioning.

Analyst Commentary

Bullish Takeaways

• Bullish analysts view the maintained Buy rating as confirmation that the long term growth thesis remains intact despite near term volatility.
• Positive momentum in the Chicago RFP is seen as a key potential catalyst that, if successfully renewed or expanded, could support upside to revenue forecasts and valuation multiples.
• Analysts highlight the company’s strong competitive and strategic positioning in public safety technology as a driver of sustained demand and contract wins over the medium term.
• Some bullish analysts argue that the reduced price target already reflects the Q3 top line miss and tempered 2026 outlook, creating a more balanced risk reward profile for long term investors.

Bearish Takeaways

• Bearish analysts point to recent contract delays as a sign of execution risk, which could pressure near term revenue growth and justify a lower valuation benchmark.
• The reduced outlook for 2026 raises concerns about the durability and pace of the company’s growth trajectory, particularly if large municipal contracts take longer to close.
• Near term top line weakness heightens sensitivity to any additional disappointments in bookings or renewals, increasing the risk of further estimate cuts.
• Some bearish analysts caution that reliance on a small number of high profile contracts may lead to elevated earnings volatility and constrain multiple expansion until visibility improves.

What's in the News

• Lowered 2025 revenue guidance to approximately $104 million after a 4% year over year decline in third quarter revenues driven by delays in a few domestic deployments, while maintaining expectations that the delayed contracts will be recognized in the near future (Corporate Guidance: Lowered).
• Introduced 2026 guidance signaling expectations for accelerated revenue growth and increased profitability beyond 2025, despite the nearer term reset in outlook (Corporate Guidance: New/Confirmed).
• Announced CrimeTracer Gen3, a major upgrade that expands the product into an agency wide crime fighting solution with AI driven analysis, natural language search, and deep integration across the SafetySmart platform, with key capabilities rolling out from mid November 2025 through the end of 2025 (Product Related Announcements).
• Updated on share repurchase activity, completing the buyback of 873,056 shares, or 6.91% of shares outstanding, for $14.62 million under the program announced in November 2022, including 160,271 shares repurchased between July 1 and November 12, 2025 for $1.99 million (Buyback Tranche Update).
• Reported higher impairment charges on property and equipment of $237,000 for the third quarter of 2025 compared with $54,000 a year earlier, adding to pressure on reported earnings (Impairments/Write Offs).

Valuation Changes

• Fair Value Estimate unchanged at $15.50 per share, indicating no revision to the intrinsic value assessment.
• Discount Rate edged down slightly from 8.61% to 8.61%, implying a marginally lower required return in the valuation model.
• Revenue Growth effectively unchanged at approximately 9.11%, suggesting stable long term top line growth assumptions.
• Net Profit Margin essentially flat at about 12.41%, reflecting no material change in long term profitability expectations.
• Future P/E decreased marginally from 14.39x to 14.39x, signaling a slightly lower multiple applied to forward earnings.