SoundHound's Q2 NRR Hits 120% From 90%: What's Fueling the Rise?
Competitive Landscape of SoundHound
In the conversational AI and voice technology space, SoundHound faces formidable competition from Nuance Communications, acquired by Microsoft MSFT and Cerence Inc. CRNC. Nuance, now part of Microsoft, has deep enterprise penetration, particularly in healthcare and customer engagement solutions, leveraging Microsoft's cloud scale and AI resources to lock in long-term contracts. This makes Nuance a consistent competitor in sectors where SoundHound is expanding, such as healthcare and enterprise automation.Cerence, meanwhile, dominates automotive voice technology, powering infotainment and in-car assistant solutions for many global OEMs. Cerence's established relationships with automakers and its focus on embedded, cloud, and hybrid models keep it directly in SoundHound's competitive path in automotive AI. Both Nuance and Cerence benefit from brand recognition, long-standing client ties, and robust R&D budgets. For SoundHound, differentiation will depend on sustaining its 120% net revenue retention through unique offerings like Voice Commerce and its proprietary Polaris engine.
SOUN Stock's Price Performance & Valuation Trend
Shares of SoundHound have rallied more than 48% since its second-quarter earnings release, performing better than the Zacks Computers - IT Services industry, as you can see below.
SOUN Stock's Price Performance
Image Source: Zacks Investment Research
SOUN stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-sales (P/S) ratio of 33.19, as evidenced by the chart below.
SOUN's P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Earnings Estimate Trend of SOUN Stock
The Zacks Consensus Estimate for 2025 loss per share has narrowed in the past seven days.The consensus estimate for 2025 sales implies growth of 98.3%. The same for the company's 2025 bottom line is expected to improve from the year-ago loss of $1.04 per share.
Image Source: Zacks Investment Research
SOUN's Zacks Rank
SOUN stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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