Cantor double downgrades SoundHound, says ‘valuation cannot be justified’

As previously reported, Cantor Fitzgerald double downgraded SoundHound to Underweight from Overweight with a price target of $4.90, down from $5.80, as the firm contends that the current valuation is “difficult to justify” given the infancy of the company’s business, the “opaqueness” of its operating model, decelerating organic growth, a lack of capex spending, the loss of customers, and growing competition from big tech. The firm, which believes the market has overlooked SoundHound’s “true valuation” given recent dilution, sees more downside risk than upside at current levels.