SoundThinking price target lowered to $21 from $25 at Lake Street

Lake Street analyst Jaeson Schmidt lowered the firm’s price target on SoundThinking to $21 from $25 and keeps a Buy rating on the shares following a Chicago Tribune article that indicated Mayor Brandon Johnson will be ending the city’s usage of ShotSpotter. The company’s $49M contract with Chicago is set to expire on February 16, notes the analyst, who calls this news “certainly negative, especially after SoundThinking’s more optimistic tone during the Q3 earnings call in November.” However, the firm’s estimates did not include any revenue contribution from Chicago after February as it had made an adjustment after Mayor Johnson won his election last April, the analyst added. While the firm thinks SoundThinking has the pipeline to backfill Chicago’s roughly $8M annual revenue, it believes “the larger issue for shares in the near term will be fighting against the negative sentiment” created by this news.