SoundHound AI (NASDAQ:SOUN) stock is trending today, with shares up more than 19% after the company reported its first-quarter results.
This rally comes after Q1 revenue beat the average analyst estimate. SoundHound also revealed that demand for its voice AI products is strong and growing.
SoundHound AI’s Q1 Results
For the period, SoundHound AI’s sales jumped 73% year-over-year (YOY) to $11.6 million. Analysts’ average estimate was for sales of $10.1 million. Meanwhile, non-GAAP net loss per share narrowed to 7 cents, in line-with analysts’ mean outlook and improving from a loss per share of 8 cents in Q1 2023.
SoundHound increased the lower end of its 2024 revenue guidance range amid the results. Its 2024 sales outlook is now between $65 million and $77 million versus the previous guidance range of $63 million to $77 million.
“AI is fast becoming a must-have tool for customer service, and that’s reflected in the demand we’re seeing for subscriptions,” said CEO Keyvan Mohajer.
Impressive Deals in Q1
During Q1, SoundHound made several new deals, including with fast-food company Church’s Chicken. Applebee’s (which is owned by Dine Brands (NYSE:DIN)) also added the firm’s technology to another 500 of its restaurants.
That’s not all. SoundHound is also partnering with Nvidia (NASDAQ:NVDA) to “deliver in-vehicle voice-enabled generative AI responses that don’t require connectivity.” Meanwhile, Stellantis (NYSE:STLA) is using SoundHound’s voice AI technology in vehicles in Japan as well.
The High Valuation and Price Action of SOUN Stock
Even before today’s gains, SOUN stock had an extremely elevated price-to-sales (P/S) ratio of nearly 24 times. At 33.4 times, its enterprise value-to-revenue ratio is meaningfully high as well.
In the past one month, shares of SOUN stock are up by about 25% as of this writing. Shares have also jumped more than 170% so far in 2024.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
