SoundHound AI's Acquisition of LivePerson Faces Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 41 minutes ago
0mins
Source: Fool
- Acquisition Plan: SoundHound AI intends to acquire LivePerson for $43 million, aiming to integrate its digital engagement suite with its audio AI technology, which could expand its product line and revenue sources, although this may dilute shareholder value in the short term.
- Financial Performance: In 2025, LivePerson generated $243.7 million in revenue, while SoundHound's revenue was just under $169 million; if the acquisition succeeds, it is expected to add $100 million to SoundHound's revenue by 2027, potentially bringing total revenue to between $350 million and $400 million.
- Profitability Concerns: While SoundHound is debt-free and expects to remain so post-acquisition, LivePerson reported a net loss of over $67 million in 2025, raising investor concerns about the integration of two unprofitable companies, which could negatively impact stock performance.
- Market Volatility: SoundHound's shares have declined approximately 29% over the past six months, and improving stock momentum will depend on either a broad market rally or an increase in 2026 revenue guidance, indicating significant short-term volatility ahead.
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Analyst Views on SOUN
Wall Street analysts forecast SOUN stock price to rise
7 Analyst Rating
5 Buy
2 Hold
0 Sell
Moderate Buy
Current: 8.560
Low
11.00
Averages
16.60
High
26.00
Current: 8.560
Low
11.00
Averages
16.60
High
26.00
About SOUN
SoundHound AI, Inc. is engaged in conversational intelligence, offering voice and conversational artificial intelligence (AI) solutions that let businesses offer experiences to their customers. Through its proprietary technology, its voice AI delivers speed and accuracy in numerous languages to product creators and service providers across retail, financial services, healthcare, automotive, smart devices, and restaurants via AI-driven products, such as Smart Answering, Smart Ordering, Dynamic Drive Thru, and Amelia AI Agents. Along with SoundHound Chat AI, a voice assistant with integrated Generative AI, it powers various products and services, and processes billions of interactions each year for businesses. Its developer platform, Houndify, is an open-access platform that allows developers to leverage its Voice AI technology and a library of over 100 content domains, including commonly used domains for points of interest, weather, flight status, sports and more.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
SoundHound AI Price Target Analysis
- Analyst Price Targets: A survey of 16 analysts for SoundHound AI indicates a price target range from $8 to $20, with an average of $14, suggesting a potential upside of 56% from the current stock price, which could position it as a top performer in the coming year if realized.
- Significant Market Potential: As a pure-play AI investment, SoundHound AI integrates audio recognition technology, presenting vast market opportunities, particularly in the restaurant sector where it has established a solid foothold, with plans to expand into insurance, finance, and healthcare.
- Strong Revenue Growth: SoundHound AI has reported a robust 52% year-over-year revenue growth, and while it is still far from profitability, this performance aligns with expectations for a company in a growth phase, indicating strong market demand.
- Attractive Valuation: With a current sales multiple of just over 18 times, SoundHound AI appears relatively cheap compared to the typical 30 times sales valuation, suggesting that if it can exceed growth expectations and expand its market presence, it will be a compelling stock for investors.
See More
SoundHound AI's Acquisition of LivePerson Faces Challenges
- Acquisition Plan: SoundHound AI intends to acquire LivePerson for $43 million, aiming to integrate its digital engagement suite with its audio AI technology, which could expand its product line and revenue sources, although this may dilute shareholder value in the short term.
- Financial Performance: In 2025, LivePerson generated $243.7 million in revenue, while SoundHound's revenue was just under $169 million; if the acquisition succeeds, it is expected to add $100 million to SoundHound's revenue by 2027, potentially bringing total revenue to between $350 million and $400 million.
- Profitability Concerns: While SoundHound is debt-free and expects to remain so post-acquisition, LivePerson reported a net loss of over $67 million in 2025, raising investor concerns about the integration of two unprofitable companies, which could negatively impact stock performance.
- Market Volatility: SoundHound's shares have declined approximately 29% over the past six months, and improving stock momentum will depend on either a broad market rally or an increase in 2026 revenue guidance, indicating significant short-term volatility ahead.
See More
SoundHound AI Shares Down 29%: Long-Term Buy Potential
- Acquisition Concerns: SoundHound AI's plan to acquire LivePerson for $43 million raises investor concerns about payment methods and shareholder dilution, contributing to a 29% decline in stock price over the past six months despite potential market advantages in audio AI technology.
- Optimistic Revenue Outlook: LivePerson is expected to add $100 million to SoundHound's revenue by 2027, potentially bringing total revenue to between $350 million and $400 million, but SoundHound must achieve its 2026 revenue target of $225 million to $260 million to ensure sustainable growth.
- Profitability Challenges: Both companies are currently unprofitable, with LivePerson reporting a net loss of over $67 million in 2025, raising investor doubts about the profitability of the integration, even as SoundHound plans to remain debt-free post-acquisition.
- Increased Market Volatility: As SoundHound navigates its aggressive expansion phase, short-term volatility is expected, and improving stock momentum will depend on either a broader market rally or an upward revision of 2026 revenue guidance in upcoming earnings reports, necessitating careful risk assessment by investors.
See More
SoundHound AI Expands into New Industries
- Industry Expansion Potential: SoundHound AI is venturing into new sectors such as insurance, finance, and healthcare, and while it has a solid foothold in the restaurant industry, its future success will hinge on customer acquisitions across multiple industries.
- Analyst Price Targets: A survey of 16 analysts indicates that SoundHound AI's price target ranges from $8 to $20, with an average of $14, suggesting a 56% upside from the current stock price, reflecting market optimism about its future performance.
- Revenue Growth Performance: SoundHound AI has achieved a 52% year-over-year revenue growth, and although it is not yet profitable, this growth rate indicates that the company is in a rapid expansion phase, likely to attract more investor interest.
- Valuation Attractiveness: Currently, SoundHound AI trades at a sales multiple of just over 18 times, which is considered relatively cheap compared to the typical 30 times valuation, highlighting its strong growth prospects and market potential.
See More
IBM: The Misunderstood Tech Giant
- Investment Rationale: When I purchased IBM in 2016, the company was undergoing a significant transformation, selling high-revenue but low-profit businesses while maintaining a dividend yield of 2.26%, indicating its low-risk investment potential.
- Market Misunderstanding: IBM's B2B focus often leads to its successes being overlooked, despite its significant potential in cloud computing, artificial intelligence, and quantum computing, reflecting a market undervaluation of its capabilities.
- Adaptability: With over 100 years of history, IBM has undergone multiple transformations, demonstrating its ability to adapt to technological changes, which is a crucial factor supporting its long-term investment value.
- Corporate Culture: IBM's corporate culture is underestimated on Wall Street; although its current stock price may not be as attractive as when I bought it, its stable business relationships and culture will ensure its continued relevance over the next decade.
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SoundHound AI Executives Accused of Breach of Fiduciary Duties
- Internal Control Deficiencies: SoundHound AI executives are accused of failing to disclose significant weaknesses in internal financial reporting controls, impairing the company's ability to account for acquisitions, which could negatively impact shareholder interests.
- False Statement Risks: Due to these internal control deficiencies, the goodwill reported following the Amelia acquisition was inflated and is expected to require correction, affecting the company's financial transparency and potentially delaying future financial reports.
- Increased Cost Expectations: The company may require additional time and expense to effectively account for the SYNQ3 and Amelia acquisitions, which will increase financial burdens and impact profitability.
- Legal Investigation Initiated: Kuehn Law is investigating whether SoundHound executives breached their fiduciary duties to shareholders, urging shareholders to contact the firm promptly to protect their rights and participate in the litigation.
See More
SoundHound AI Price Target Analysis
- Analyst Price Targets: A survey of 16 analysts for SoundHound AI indicates a price target range from $8 to $20, with an average of $14, suggesting a potential upside of 56% from the current stock price, which could position it as a top performer in the coming year if realized.
- Significant Market Potential: As a pure-play AI investment, SoundHound AI integrates audio recognition technology, presenting vast market opportunities, particularly in the restaurant sector where it has established a solid foothold, with plans to expand into insurance, finance, and healthcare.
- Strong Revenue Growth: SoundHound AI has reported a robust 52% year-over-year revenue growth, and while it is still far from profitability, this performance aligns with expectations for a company in a growth phase, indicating strong market demand.
- Attractive Valuation: With a current sales multiple of just over 18 times, SoundHound AI appears relatively cheap compared to the typical 30 times sales valuation, suggesting that if it can exceed growth expectations and expand its market presence, it will be a compelling stock for investors.
See More
SoundHound AI's Acquisition of LivePerson Faces Challenges
- Acquisition Plan: SoundHound AI intends to acquire LivePerson for $43 million, aiming to integrate its digital engagement suite with its audio AI technology, which could expand its product line and revenue sources, although this may dilute shareholder value in the short term.
- Financial Performance: In 2025, LivePerson generated $243.7 million in revenue, while SoundHound's revenue was just under $169 million; if the acquisition succeeds, it is expected to add $100 million to SoundHound's revenue by 2027, potentially bringing total revenue to between $350 million and $400 million.
- Profitability Concerns: While SoundHound is debt-free and expects to remain so post-acquisition, LivePerson reported a net loss of over $67 million in 2025, raising investor concerns about the integration of two unprofitable companies, which could negatively impact stock performance.
- Market Volatility: SoundHound's shares have declined approximately 29% over the past six months, and improving stock momentum will depend on either a broad market rally or an increase in 2026 revenue guidance, indicating significant short-term volatility ahead.
See More
SoundHound AI Shares Down 29%: Long-Term Buy Potential
- Acquisition Concerns: SoundHound AI's plan to acquire LivePerson for $43 million raises investor concerns about payment methods and shareholder dilution, contributing to a 29% decline in stock price over the past six months despite potential market advantages in audio AI technology.
- Optimistic Revenue Outlook: LivePerson is expected to add $100 million to SoundHound's revenue by 2027, potentially bringing total revenue to between $350 million and $400 million, but SoundHound must achieve its 2026 revenue target of $225 million to $260 million to ensure sustainable growth.
- Profitability Challenges: Both companies are currently unprofitable, with LivePerson reporting a net loss of over $67 million in 2025, raising investor doubts about the profitability of the integration, even as SoundHound plans to remain debt-free post-acquisition.
- Increased Market Volatility: As SoundHound navigates its aggressive expansion phase, short-term volatility is expected, and improving stock momentum will depend on either a broader market rally or an upward revision of 2026 revenue guidance in upcoming earnings reports, necessitating careful risk assessment by investors.
See More
SoundHound AI Expands into New Industries
- Industry Expansion Potential: SoundHound AI is venturing into new sectors such as insurance, finance, and healthcare, and while it has a solid foothold in the restaurant industry, its future success will hinge on customer acquisitions across multiple industries.
- Analyst Price Targets: A survey of 16 analysts indicates that SoundHound AI's price target ranges from $8 to $20, with an average of $14, suggesting a 56% upside from the current stock price, reflecting market optimism about its future performance.
- Revenue Growth Performance: SoundHound AI has achieved a 52% year-over-year revenue growth, and although it is not yet profitable, this growth rate indicates that the company is in a rapid expansion phase, likely to attract more investor interest.
- Valuation Attractiveness: Currently, SoundHound AI trades at a sales multiple of just over 18 times, which is considered relatively cheap compared to the typical 30 times valuation, highlighting its strong growth prospects and market potential.
See More
IBM: The Misunderstood Tech Giant
- Investment Rationale: When I purchased IBM in 2016, the company was undergoing a significant transformation, selling high-revenue but low-profit businesses while maintaining a dividend yield of 2.26%, indicating its low-risk investment potential.
- Market Misunderstanding: IBM's B2B focus often leads to its successes being overlooked, despite its significant potential in cloud computing, artificial intelligence, and quantum computing, reflecting a market undervaluation of its capabilities.
- Adaptability: With over 100 years of history, IBM has undergone multiple transformations, demonstrating its ability to adapt to technological changes, which is a crucial factor supporting its long-term investment value.
- Corporate Culture: IBM's corporate culture is underestimated on Wall Street; although its current stock price may not be as attractive as when I bought it, its stable business relationships and culture will ensure its continued relevance over the next decade.
See More
SoundHound AI Executives Accused of Breach of Fiduciary Duties
- Internal Control Deficiencies: SoundHound AI executives are accused of failing to disclose significant weaknesses in internal financial reporting controls, impairing the company's ability to account for acquisitions, which could negatively impact shareholder interests.
- False Statement Risks: Due to these internal control deficiencies, the goodwill reported following the Amelia acquisition was inflated and is expected to require correction, affecting the company's financial transparency and potentially delaying future financial reports.
- Increased Cost Expectations: The company may require additional time and expense to effectively account for the SYNQ3 and Amelia acquisitions, which will increase financial burdens and impact profitability.
- Legal Investigation Initiated: Kuehn Law is investigating whether SoundHound executives breached their fiduciary duties to shareholders, urging shareholders to contact the firm promptly to protect their rights and participate in the litigation.
See More
