SoundHound AI Stock Drop Looks Sharp, But How Deep Can It Go?

SoundHound AI (SOUN) stock is down 36.4% in 21 trading days. The recent slide reflects renewed concerns around its stretched valuation and widening losses, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?

Before judging its downturn reslience, let’s look at where SoundHound AI stands today.

• Size: SoundHound AI is a $4.5 Bil company with $131 Mil in revenue currently trading at $11.29.
• Fundamentals: Last 12 month revenue growth of 137.0% and operating margin of -126.2%.
• Liquidity: Has Debt to Equity ratio of 0.0 and Cash to Assets ratio of 0.4
• Valuation: SoundHound AI stock is currently trading at P/E multiple of -20.1 and P/EBIT multiple of -19.6
• Has returned (median) -8.2% within a year following sharp dips since 2010. See SOUN Dip Buy Analysis.

These metrics point to a Moderate operational performance, alongside Very High valuation – making the stock Unattractive. For details, see Buy or Sell SOUN Stock

That brings us to the key consideration for investors worried about this fall: how resilient is SOUN stock if markets turn south? This is where our downturn resilience framework comes in. Suppose SOUN stock falls another 20-30% to $8 – can investors comfortably hold on? Turns out, the stock has fared much worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.

2022 Inflation Shock

• SOUN stock fell 93.6% from a high of $14.98 on 5 May 2022 to $0.97 on 22 December 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 6 December 2024
• Since then, the stock increased to a high of $24.23 on 26 December 2024 , and currently trades at $11.29

 
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