SoundHound’s Week in Review: Earnings Uncertainty & Valuation Questions

Core Viewpoint - SoundHound AI's stock has significantly underperformed, dropping 51% over the past year, with a 12.85% decline this week alone, as investors reassess the company's path to profitability [2][9]. Group 1: Performance Analysis - The broader market declined by 1.29% this week, while SoundHound's stock fell nearly 10 times that amount, resulting in a year-to-date decline of 25.18% compared to the S&P 500's flat performance [3]. - SoundHound has a market cap of $3.13 billion but generated only $148.4 million in trailing twelve-month revenue, leading to a high price-to-sales ratio of 21x, indicating elevated growth expectations [4]. - The company's beta of 2.876 suggests it is highly volatile, moving almost three times as much as the market during both rallies and selloffs [3]. Group 2: Earnings Outlook - SoundHound is set to report Q4 2025 results on February 26, 2026, with Wall Street expecting a significant sequential sales increase from $42.05 million last quarter to $53.88 million in Q4 [6][7]. - Adjusted EPS is anticipated to be -$0.10 per share for Q4, and if the company meets or misses these expectations, further selling pressure is likely [7]. Group 3: Insider Activity - On December 22, 2025, six executives sold shares at $11.2769, with CEO Keyvan Mohajer selling 144,326 shares for approximately $1.6 million, indicating potential caution among insiders [8].