Should YOU BUY SoundHound AI Stock NOW? - SOUN Stock Analysis 

If / when this happens, the stock would go to the moon 🌜

@DWebb-hr4rh Thanks for the comment!!! And thank you for those kind words!!! It’s hard to hide the passion 😂 The thesis remains the same and the numbers don’t lie. All C-level executives from CEO on down sold 280,000 shares combined for $4 on 6/20/24. If they honestly “knew” or “thought” the stock would go up 55% only a couple weeks later, they would not have done that. This run up is a classic covering of a short squeeze. Hopefully traders book some gains and cover the downside because the 70.6 million shares short are not going away. In fact, I bet they will increase. The company still has negative EBITDA and Net income and I don’t see that changing anytime soon. With such crazy volatility, I would bet that we will see $4 again before year end unless they are able to pull off some unexpectedly positive results putting them ahead of schedule. Definitely keep an eye on 2Q earnings coming out in August. AI voice technology is going to be a game changer, but investing is about numbers not just “ideas”. Have a good one!!! 😃👍🏼

@@kenfreemancfa I appreciate the thorough reply. You have a good one yourself! ✌

Thanks for the comment!!! And thanks for the feedback, I appreciate it!!! As you can imagine, a lot of work goes into these videos and I want it to be simple enough for anyone to understand, but with enough detail & insight that folks in finance will find value as well. Always a delicate balance ⚖️ Have a great day!!!😃👍🏼

@johneisenberg3120 Thanks for the comment!!! And thanks for the compliment 😊 I agree 100%, SoundHound has a ton of potential, but it is going to take time for the technology to be fully developed and implemented. If one is patient with it and doesn’t get rattled by the short-term volatility, it has significant long-term payoff potential💰 Good Luck 🍀👍🏼

Thanks for the comment!!! I’m glad that I was able to break it down and make it helpful for you!!! 😃👍🏻

@yourmanzach2307 Thanks for the comment!!! It takes a very long time to analyze companies like this and really get into the weeds & I’m glad that it comes through the video 😬 Companies like SOUN & SOFI are SUPER volatile so, this is more likely to be $5 than $10 in the next 2-3 months. There is a massive short overhang and when the stock pops, it’s a mini squeeze, but the shorts aren’t going away anytime soon so, you will have your shot at this one, trust me 🙏🏼

@@kenfreemancfa dude you’re the best seriously! If you feel like making short videos here and there to cover stuff like short interest or any indicators you see that many others wouldn’t I would highly appreciate that. With SOUN Sofi etc. will you be doing live videos in the future to maybe chat with subscribers about stocks?

@yourmanzach2307 Thanks Brother!!! I’m honestly open to livestream as long as we get a solid turnout. I’m planning on offering a membership for those who are interested in a deeper dive and more in depth explanations of things like short squeezes, prof forma adjustments, what increases & decreases value, etc. I’m also working on a FREE newsletter that I’ll have up and running very soon so, I’ll be sure to let you know when it’s ready to rock. Lmk if you have any questions in the meantime 😃👍🏼

@@kenfreemancfa I’d be down! Yeah keep me updated. Also what are your thoughts on SMCI? Great long term investment?

@yourmanzach2307 SMCI got caught up in the NVDA hype cycle but unlike SOUN, there is a profitable business here. The company has been public for 17 years so there is a lot of data and results have been positive for years. I haven’t dug into the financials and done a proper valuation, but from what I see, it has solid LT potential but the valuation is a little frothy right now (44x EBITDA) but it is 4.5x LTM sales which is reasonable. I have this on my radar of stocks to look at 🤓👍🏼

Thanks for the comment!!! $1.50 is impressive, congrats!!! Even Company Management sold 280,000 shares on 6/20/24 at $4.00 so, if you stay focused on the long-term, hold on tight and the company turns a profit, you will be rewarded handsomely💰Good Luck!!!🍀

@@kenfreemancfa last time it pumped I bought more on the way up too can’t deny lol My cost basis is in the mid 3s by now. The tech sold me early on

$3 is a good average price. Dollar cost average into it and hold on tight. Once they turn profitable, this could be a very solid play. Right now with $180mm of cash and zero debt, they have a squeaky clean balance sheet. Now, they just need to laser focus on becoming profitable. You have the right mindset / approach, all you need now is time!!! 😃👍🏼

Thanks for the comment!!! And thanks for the feedback!!! I’m like your favorite band at the local bar, I always take requests 😉 I took a look at ACHR and the company has negative EBITDA, more importantly it is increasingly negative (went from ($241mm) in 2021 to ($469mm) in 2023) and we can’t do a DCF valuation on negative EBITDA. If a company has negative EBITDA but it is improving and will turn positive in the next 5 years then, we can do it (this was the case with SOUN & SOFI). Otherwise, we will get a negative stock value for the Company and that’s impossible in reality, it can only go to zero. I’m familiar with evTOL companies as I have an investment in JOBY, but I treat it like venture capital or an investment on Shark Tank since it will take years to turn a profit. Have a great day!!!😃👍🏼

@@kenfreemancfa good to know! Thank you for the response!

You’re welcome!!! 🙌🏼

Still have a few months to go and with a Beta of 3, make sure to have some downside protection!!! 🤓👍🏻📉

And yet they can't turn a profit lol

Thanks for the comment!!! The customer list is impressive for sure, BUT it is earnings that count. Until the company is consistently profitable, at least at an EBITDA level, this stock will be an absolute roller coaster 🎢

@awakenedsoul Thanks for the comment!!! At some point the rubber needs to meet the road. I didn’t mince words in the video…the company has a high cash burn rate and even at 55% top line growth, they do not turn profit at an EBITDA level until 2028 😳 Customers need to turn into dollars and profits for this to be a winner long-term 👍🏼

Thanks for the comment!!! I took a look at Rocket Labs financials and they have over ($100mm) in negative EBITDA. To do a DCF valuation, we need positive EBITDA and I don’t think they will achieve that over the next 5 years based on the Financials I looked through. If/when things change, I’d be happy to do a valuation of it 😬👍🏼

Thanks for the comment!!! As mentioned in the video, literally every C-level executive SOLD 280,000 shares total at $4 on 6/20/24. If they “thought” or “knew” the stock would rise 55%, would they have sold??? Simple answer, no. What does that mean??? This stock is SUPER volatile and there is a MASSIVE short overhang. This week was a mini short squeeze and the shorts are not going away. Punchline, YES, I think you will have the opportunity to get in at $5 or below before earnings 🤑👍🏻

@@kenfreemancfa Thanks for answering 🙌

You’re welcome!!! 😃👍🏼

Thanks for the comment Tony!!! I’ll take a look at Arqit and circle back 🤓👍🏼

I took a look at ARQQ and the company has negative EBITDA with very choppy revenue that is difficult to project into the future since it goes from 0 to 48 to 7,212 then down to 640 😳 If a company has negative EBITDA but it is improving and will turn positive in the next 5 years then, we can do a DCF valuation (this was the case with SOUN & SOFI). Otherwise, we will get a negative stock value for the Company and that’s impossible in reality, it can only go to zero. Have a great day!!!😃👍🏼

Thanks for the comment!!! I am glad you enjoyed the video!!! Congrats for being long on SOUN and capturing this big pop!!! 🤑👍🏼In this case, the SOUN pop is a mini short squeeze, but I doubt the shorts are going away so long as SOUN continues to have negative EBITDA and Net Income. It will be interesting to see what is disclosed about the Stellantis deal in the next earnings. The real head scratcher is that all C-level executives at SoundHound sold a combined 280,000 shares at $4 on 6/20/24. If they “thought” or “knew” the stock would go up 55% then, they wouldn’t have done that which further validates the short squeeze conclusion. Don’t be shocked if the stock is back down in the $4 range in the not too distant future with such a high Beta. Take some gains and lock in the win 💪🏼💰👍🏼 Good Luck 🍀

Thanks for the comment!!! I will take a look at both companies and respond back to let you know if we can do a video on them 😃👍🏼

@@kenfreemancfa 👍❤️🙏

Thanks for the comment!!! In the short-term while the stock is volatile, that will lock in some gains, but once it is profitable, over the long-term, you will be better served to hold and not sell. Good Luck 😃👍🏼🍀

This means that you will lose increasingly larger amount of potential profit that you would get by just holding all your shares. I see your point, you are locking in your profit, but still, if at some point of time you realise that you have gained only 1/4 or 1/8 of your potential profit, it will be extremely painful. If I were you, I would use this method only once when the share goes up 2X or a bit more. Take out the invested amount and hold the profit portion for long-term whatever happens. Or at least hope that every peak is followed by deep drop and replenish the position back to the initial amount every time. Gradually reducing a growing stock position doesn't look right to me.

@@arnoldsbaltnegeris3962 It still depends on the situation. Therefore, the stock fluctuates greatly. I have been doing this by reducing costs to increase the quantity.

@arnoldsbaltnegeris3962 Great insights!!! Thank you for sharing this!!! 😃

Thanks for the comment!!! It’s my pleasure, I enjoy doing detailed stock & valuation analysis. Stay tuned for the next one, every Friday 😬👍🏻

Thanks for the comment!!! I see that they are reporting on August 12th so, I will put VTSI on the radar after earnings. Have a great day😃👍🏼

Thanks for the comment!!! After filming, the stock shot up after the Stellantis press release, but I wasn’t going to re-film because it doesn’t change the thesis based on the current numbers. As mentioned in the video, literally every C-level executive SOLD 280,000 shares total at $4 on 6/20/24. If they “thought” or “knew” the stock would rise 55%, would they have sold??? Simple answer, no. What does that mean??? This stock is SUPER volatile and there is a MASSIVE short overhang. This week was a mini short squeeze and the shorts are not going away. Until the Financials stabilize and they have positive EBITDA and earnings, this stock will continue to be a rollercoaster ride 🎢

@@kenfreemancfa Thank you for your thoughts on move up of SOUN

@frankt7521 Honestly, it is my pleasure. I’m trying to bring some sanity to the investing game. For the Bulls, I’m happy for them. BUT, I’d much rather see some gains locked in than people thinking this is going to $100 next month. Long-term, if/when SOUN becomes profitable, I’M IN, but until then, I’m keeping my eye on it and watching from afar. I’m sticking to my thesis in the video of $5-5.50 until the numbers change and I have to change with them. 😃👍🏼

@@kenfreemancfa how did you find the executives sold shares? this would be very useful to keep track of. with SMCI the CEO hasn't sold anything yet that I know of and he has like $3B worth! and he doesn't take a salary, so maybe he just cashes out a very tiny amount of stock yearly.

@yourmachzach2307 You can find out about insider sales by looking at Form 4 filings which insiders have to file every time they make a purchase or sale. Fortunately you can just go to secform4.com and track the insider actions of any publicly traded company 🤓👍🏼

Thanks for the comment!!! Honestly, with a stock that has a Beta of 3, anything is possible. The current run up is part the Stellantis news and part short covering (i.e. short squeeze). As I mentioned in the video, all C-level executives sold a combined 280,000 shares at $4 on 6/20/24. If they “thought” or “knew” the stock was going to go up 55%, they would not have done that, obviously. Therefore, the only logical conclusion is that the 70.6mm shares short (21% of shares out) had to cover their positions as the stock went up on the Stellantis news. There were no dollar figures quoted in the Stellantis press release, only that they were rolling out SoundHound’s Chat AI in Stellantis cars in 11 markets which will increase to 17 by the end of July (consider this a “pilot”). Is it a positive? Yes! Did the Company actually create $700mm of value? No. Net Net, if you are “trading” the news, be careful to lock in gains when you can. If you are a long-term investor, I would wait for another pullback to buy. I hope that helps 🤓👍🏼

@@kenfreemancfa weird, so those executives thought SOUN would continue to drop and boy were they wrong...

Wrong indeed, but the stock is down (9.2%) today on no news whatsoever which just speaks to the volatility of such a high Beta stock🎢

Thanks for the comment!!! Everyone is looking for the “Next Tesla”, but they don’t realize that for every one Tesla, there are another 100 companies that no longer exist. Telling people to invest in the S&P500 is like telling people to eat vegetables. They know they should, but they simply refuse. I just try to do my part showing what the valuation is based on the numbers without sugar coating anything. Have a great day 😃👍🏼

Thanks for the comment!!! And thank you for the feedback, I really appreciate it!!!😃👍🏻

Thanks for the comment!!! And the compliment 🤩👍🏼

Thanks for the comment!!! I believe in the business and the concept, now we just need to see the results come through. They have a clean balance sheet and tons of potential, but now it’s time to execute. Once they turn a profit, the stock will be less of a roller coaster 🎢 Good Luck!!! 🍀👍🏼

Thanks for the comment!!! That is true, Nvidia backing is a HUGE endorsement for SOUN. Just be prepared for a TON of volatility. After I dropped the video, the stock shot up to $6.30 after the news on Stellantis rolling SoundHound out in cars in Europe as a pilot in 17 markets and a short covering ensued. This week with the Tech bloodbath, the stock closed yesterday at $4.93. From 6/20 at $4 up to $6.30 3 weeks later and then back to $4.93 yesterday, that is an increase of 57.5% increase followed by a (22%) decrease in a week. So, take a long-term view rather than approaching it as a trade. Good Luck 🍀👍🏼

As I mentioned in the video, the company has 31.5 months of cash based on the current cash burn rate of $68mm and almost 5 years if they add the $150mm equity shelf they have available. That being said, if they don’t decrease the cash burn rate, it won’t end pretty ☠️

Thanks for the comment!!! After I filmed the video, the stock shot up, but it doesn’t change my thesis / valuation of $5-5.50. All C-level executives combined sold 280,000 shares at $4 on 6/20/24 and if they “knew” or “thought” the stock would go up, they wouldn’t have missed out on a 55% gain. This is classic covering of a short squeeze on a highly volatile stock. We will see $4 before we see $10. Have a great day😃

Thanks for the comment!!! Can you imagine if Google / Amazon / Apple decided that they want to own the Voice AI space?!?!? It would be game over really fast, no doubt about it. The executives of SOUN are visionaries not operators, that much is obvious.

Would you like to revisit this comment? 😂