SoundHound AI, Inc. (NASDAQ:SOUN) Just Released Its Third-Quarter Earnings: Here's What Analysts Think

As you might know, SoundHound AI, Inc. (NASDAQ:SOUN) just kicked off its latest quarterly results with some very strong numbers. Revenues beat expectations coming in atUS$25m, ahead of estimates by 9.0%. Statutory losses were somewhat smaller thanthe analysts expected, coming in at US$0.06 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for SoundHound AI

Taking into account the latest results, the most recent consensus for SoundHound AI from seven analysts is for revenues of US$162.0m in 2025. If met, it would imply a huge 141% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 22% to US$0.23. Before this earnings announcement, the analysts had been modelling revenues of US$152.1m and losses of US$0.21 per share in 2025. So it's pretty clear the analysts have mixed opinions on SoundHound AI even after this update; although they upped their revenue numbers, it came at the cost of a noticeable increase in per-share losses.

The consensus price target stayed unchanged at US$8.07, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on SoundHound AI, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$6.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that SoundHound AI's rate of growth is expected to accelerate meaningfully, with the forecast 102% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 36% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect SoundHound AI to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at SoundHound AI. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$8.07, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple SoundHound AI analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 4 warning signs for SoundHound AI (1 shouldn't be ignored) you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.