Core Viewpoint - SoundHound AI has experienced a significant stock decline of over 50% year-to-date, primarily due to disappointing investor expectations following the Consumer Electronics Show (CES) [3][4] Valuation Perspective - SoundHound AI stock appears overpriced with a price-to-sales (P/S) ratio of 36.2 compared to 3.1 for the S&P 500, indicating a high valuation relative to its sales [6] - The company's operating performance and financial health raise concerns about the stock's current appeal [4][13] Financial Performance - SoundHound AI's revenues have grown at an average rate of 69.0% over the last three years, with a 101.4% increase from $51 million to $102 million in the last 12 months [9] - Quarterly revenues grew 151.2% to $29 million from $12 million a year ago [9] - However, the company's profit margins are considerably worse than most companies in the Trefis coverage universe, with an operating income of -$142 million and a net income margin of -183.6% [10][15] Financial Stability - SoundHound AI's balance sheet is strong, with a debt figure of $4.6 million and a market capitalization of $4.0 billion, resulting in a low debt-to-equity ratio of 0.1% [15] - Cash and cash equivalents make up $246 million of the total assets of $588 million, yielding a cash-to-assets ratio of 41.8% [15] Downturn Resilience - SOUN stock has performed poorly during recent downturns, with a peak-to-trough decline of 93.6% from a high of $14.98 to $0.97, compared to a 25.4% decline for the S&P 500 [16] - The stock's resilience during economic downturns is rated as extremely weak [16]