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On Wednesday, SoundThinking (NASDAQ:SSTI), a technology company with a market capitalization of $199 million and trailing twelve-month revenue of $105 million, received a vote of confidence from Cantor Fitzgerald as the firm maintained its Overweight rating and $20.00 price target on the company’s stock. According to InvestingPro data, analysts’ price targets for the stock range from $18 to $30, suggesting potential upside from current levels. The endorsement comes after SoundThinking reported strong first-quarter results for 2025, surpassing FactSet consensus estimates for both revenue and operating income.
The company’s financial performance for the quarter was notably boosted by a $3.5 million revenue increase, attributed to two significant contracts with the New York Police Department (NYPD) that were carried over from the previous fiscal year. These contracts had originally been expected to contribute to the company’s financials in FY24 but were delayed, providing an unexpected benefit to the first quarter of 2025. The company maintains a healthy gross profit margin of 57%, though InvestingPro analysis indicates it is currently trading at a relatively high EBITDA multiple, suggesting investors are pricing in significant growth expectations.
In addition to the positive revenue news, SoundThinking has confirmed its revenue forecast for the future. However, it has made a slight adjustment to its outlook for EBITDA margins. The specifics of the revised EBITDA margin forecast were not disclosed, but the firm indicated that the adjustment was minor.
The analyst at Cantor Fitzgerald, in a statement about the company’s performance and outlook, said, "We maintain our Overweight rating and reiterate our 12-month PT at $20. SoundThinking delivered solid 1Q25 results, exceeding FactSet consensus on revenue and operating income. These results were partially driven by a $3.5 million top-line tailwind from two key NYPD contracts delayed from FY24. SoundThinking also reaffirmed its topline guidance but slightly lowered its EBITDA margin outlook."
Investors in SoundThinking will continue to monitor the company’s performance as it navigates through the fiscal year, with the reaffirmed revenue guidance and updated EBITDA margin outlook in mind. The company’s ability to exceed expectations in the first quarter sets a positive tone for its financial trajectory in the coming months. The stock has shown strong momentum, posting a 40.8% return over the past six months. For deeper insights into SoundThinking’s valuation and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports.
In other recent news, SoundThinking Inc. reported its Q1 2025 earnings, showcasing a strong revenue performance that exceeded expectations. The company achieved a revenue of $28.3 million, surpassing the forecast of $25.64 million, marking a 12% year-over-year growth. However, the earnings per share (EPS) fell slightly short at -$0.12 compared to the anticipated -$0.10. Despite the EPS miss, the company’s adjusted EBITDA grew by 50% year-over-year, highlighting robust operational efficiency. SoundThinking also reaffirmed its full-year revenue guidance of $111 million to $113 million, with expectations for an annual recurring revenue increase to $110 million by early 2026. The company is seeing significant potential in its AI-enhanced law enforcement tools and has made strides in international markets, including Brazil. Additionally, SoundThinking is positioning its SafePoint technology to capitalize on new legislative requirements in California, which mandates weapon protection systems in hospitals by 2027. These recent developments indicate a strategic focus on growth and expansion across various sectors and geographies.
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