Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Craig-Hallum has reduced its price target on SoundThinking (NASDAQ:SSTI) to $21.00 from $24.00 while maintaining a Buy rating ahead of the company’s second-quarter earnings report. The stock, currently trading at $11.30, has declined 12.56% year-to-date, according to InvestingPro data.
The research firm expects SoundThinking to deliver mixed results when it reports on Tuesday, noting the absence of significant contract wins or losses since the first-quarter report. Despite revenue growth of 7.65% and a healthy gross margin of 57.14%, InvestingPro analysis indicates the company faces near-term profitability challenges.
Despite the price target reduction, Craig-Hallum remains "very optimistic" that SoundThinking is the frontrunner to win the request for proposal bid for Chicago, which it views as a significant potential catalyst in the second half of 2025.
The firm cited potential tariff impacts and research and development investments that could affect adjusted EBITDA as reasons for taking a more cautious view on profitability.
Craig-Hallum also highlighted growth opportunities for SoundThinking’s Crime Tracer product, which it believes has "excellent long-term potential," and noted that recent high-profile gun violence incidents could create demand for both the ShotSpotter system and the company’s SafePointe weapons detection product.
In other recent news, SoundThinking reported its first-quarter earnings for 2025, showing a mixed financial performance. The company achieved a revenue of $28.3 million, exceeding analyst expectations of $25.64 million. However, the earnings per share (EPS) did not meet projections, coming in at -$0.12 compared to the expected -$0.10. This revenue growth was partly due to a $3.5 million boost from contracts with the New York Police Department, which had been delayed from the previous fiscal year. Cantor Fitzgerald maintained its Overweight rating on SoundThinking and set a price target of $20.00, reflecting confidence in the company’s trajectory despite the EPS miss. These recent developments indicate strategic initiatives contributing to the revenue growth. Investors appeared to respond positively to the revenue beat, as indicated by aftermarket trading activity.
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