Northland trims SoundHound AI target to $12 following Q1 earnings
SoundHound AI reported $44.2 million in first-quarter revenue, beating forecasts but missing EBITDA estimates as the company accelerates technology spending and prepares for its LivePerson acquisition.
Northland Research has reduced its price target for SoundHound AI (NASDAQ: SOUN) from $14 to $12, while maintaining an Outperform rating on the stock. The adjustment, issued on 8 May, follows the release of SoundHound’s first-quarter financial results, which revealed a divergence between top-line growth and profitability metrics.
The research firm cited reduced adjusted EBITDA expectations as the primary driver for the downgrade. SoundHound reported first-quarter revenue of $44.2 million, representing a 52 per cent year-on-year increase that exceeded analyst forecasts. However, the company missed EBITDA estimates, a shortfall Northland attributed to significant investments in technology and growth initiatives.
Alongside the earnings release, SoundHound announced an agreement to acquire LivePerson. The transaction is designed to combine SoundHound’s voice and agentic AI capabilities with LivePerson’s digital messaging services. The combined entity is projected to create a $500 million revenue opportunity and strengthen the balance sheet, with the deal expected to close in the second half of 2026.
The acquisition is also positioned to expand SoundHound’s enterprise footprint, providing access to 25 Fortune 100 companies within the conversational AI sector. Management forecasts 2027 revenue to reach between $350 million and $400 million, with more than $100 million potentially derived from LivePerson’s existing customer base.
While Northland acknowledges the potential of SoundHound as an investment, the firm noted that other AI stocks may offer greater upside with less downside risk. SoundHound remains a leader in conversational intelligence solutions across retail, financial services, healthcare, automotive, and smart devices.
