Investing 10-06-2024 17:08 18 Views

SoundHound AI prepays debt in full

SoundHound AI (NASDAQ: SOUN) share price is in the green this morning after the company said it prepaid its debt in full. 

SoundHound stock gains as company turns debt free

SoundHound has inked an agreement with its lenders to make an early payment in full for its outstanding $100 million debt, as per a press release on Monday. 

The update is significant for SoundHound stock because it saves the speech recognition firm over $55 million in interest and fees. Nitesh Sharan – the chief financial officer of $SOUN also said today:

With the massive opportunity to deliver innovative AI around the world, our strong net cash position has meaningfully improved our financial profile.

SoundHound also now has about $14 million of restricted cash available after signing the aforementioned agreement with its lenders. 

The Nasdaq listed firm also confirmed today that the announced agreement with lenders also makes $14 million of restricted cash available. SoundHound stock is down roughly 45% versus its year-to-date high at writing. 

SoundHound AI currently has $180 million in cash

SoundHound stock price is gaining at writing because the voice artificial intelligence company has no outstanding debt after the announced repayment on Monday. 

The California based company now boasts a solid liquidity position with sufficient flexibility. According to CFO Nitesh Sharan:

We now have a capital structure free of debt, which will allow us to move even more nimbly to capture the increasing customer demand for our voice AI solutions.

Note that $SOUN currently has about $180 million in cash. 

The news arrives about a month after Seth Klarman – the billionaire founder of Baupost announced to have invested in SoundHound shares (find out more). His value-oriented hedge fund has about $27 billion in assets under management.

Should you buy SoundHound shares today?

In May, SoundHound AI reported better-than-expected financial results for its first quarter and issued upbeat guidance for the future as well (read more).

That made analysts at H.C. Wainwright reiterate their “buy” rating on $SOUN. Their $7.0 price objective suggests close to a 50% upside from here. 

The firm is super bullish on SoundHound stock price especially as the AI leader Nvidia Corp is invested in it. The artificial intelligence company has guided for up to $77 million in revenue this year – much better than $69.5 million that analysts had forecast. 

SOUN shares do not currently pay a dividend, though. 

Watch here: https://www.youtube.com/embed/x43Ar6A4HK0?feature=oembed

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