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On Wednesday, SoundThinking (NASDAQ:SSTI) stock maintained its Overweight rating and a $20.00 price target from Cantor Fitzgerald, despite reporting fourth-quarter earnings for 2024 that missed expectations. The stock, which has declined 9.5% over the past week according to InvestingPro data, saw its revenue, Adjusted EBITDA, and EPS for the quarter miss FactSet consensus figures.
The shortfall in SoundThinking’s financial results was attributed to a $3.5 million impact on the top line, stemming from two significant New York Police Department (NYPD) contracts. One contract has been finalized, and the other is anticipated to be completed within the next 45 days. Despite recent challenges, InvestingPro data shows the company maintains strong revenue growth of 19.4% over the last twelve months.
Despite the disappointing fourth-quarter performance, SoundThinking has increased its financial outlook for the full year 2025. The company’s updated guidance forecasts year-over-year margin improvements and a double-digit percentage increase in revenue. This optimistic outlook reflects SoundThinking’s expectations for its financial growth and operational performance in the coming year.
The company’s future prospects seem to hinge on the successful finalization of its NYPD contracts and the realization of its projected financial targets. SoundThinking’s management appears confident in the company’s ability to overcome the temporary setbacks experienced in the last quarter of 2024.
In other recent news, SoundThinking reported disappointing fourth-quarter 2024 earnings, with an earnings per share (EPS) of -$0.32, falling short of the forecasted $0.0043. The company also missed revenue expectations, posting $23.4 million against the anticipated $26.92 million. Despite these setbacks, SoundThinking achieved a full-year revenue increase of 10% year-over-year, reaching $102 million. Craig-Hallum analyst Jeremy Hamblin responded to these results by raising the price target for SoundThinking to $27, maintaining a Buy rating, citing confidence in the company’s long-term growth prospects. The analyst noted SoundThinking’s recent extension of its NYPD ShotSpotter contract and the potential for a significant contract in Chicago, which could enhance investor sentiment and valuation. The company has also updated its FY25 revenue and EBITDA forecasts upwards, anticipating a 10% year-over-year growth. SoundThinking is optimistic about its international expansion and new product launches, which are expected to contribute significantly to its annual recurring revenue. CEO Ralph Clark highlighted 2024 as a transformative year, emphasizing the company’s leadership in gunshot detection technology and successful international expansion efforts.
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