soundhound ai, inc. is a company that makes computers and smartphones understand what we say. sometimes, they do it better than others. so, people like to buy their things because they work well. that is why their stock price has gone up recently. but, we should also look at how much money they make and how they do it to see if the stock price is fair or not. Read from source...

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SoundHound AI, Inc. (SOUN) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Over the past month, shares of this company have returned +25.1%, compared to the Zacks S&P 500 composite's +2% change. During this period, the Zacks Computers - IT Services industry, which SoundHound AI falls in, has gained 2.7%. The key question now is: What could be the stock's future direction?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Earnings Estimate Revisions
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

SoundHound AI is expected to post a loss of $0.09 per share for the current quarter, representing a year-over-year change of +10%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

For the current fiscal year, the consensus earnings estimate of -$0.33 points to a change of +13.2% from the prior year. Over the last 30 days, this estimate has remained unchanged.

For the next fiscal year, the consensus earnings estimate of -$0.22 indicates a change of +33.3% from what SoundHound AI is expected to report a year ago. Over the past month, the estimate has remained unchanged.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for SoundHound AI.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS
Revenue Growth Forecast
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost