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Investing.com - Cantor Fitzgerald reduced its price target on SoundThinking (NASDAQ:SSTI) to $16.00 from $20.00 on Thursday, while maintaining an Overweight rating on the stock. Despite trading at just $8.43, significantly below the new target, InvestingPro data shows the stock appears undervalued compared to its Fair Value, with its RSI indicating oversold territory.
The price target adjustment follows SoundThinking’s third-quarter 2025 results, which fell short of FactSet consensus estimates for both revenue and Adjusted EBITDA. The company’s performance was primarily impacted by the non-renewal of a contract with Puerto Rico and several delays in domestic and international deployments. InvestingPro data reveals that three analysts have recently revised their earnings downward for the upcoming period, with the company reporting $102.75 million in revenue over the last twelve months.
SoundThinking has lowered its full-year revenue guidance and EBITDA margin outlook in response to these challenges. The company is also reorganizing its sales structure, including a shift back to focusing on fewer products per salesperson to address go-to-market difficulties. With a current ratio of 0.85, the company’s short-term obligations currently exceed its liquid assets, though it operates with a moderate level of debt.
Despite the near-term setbacks, Cantor Fitzgerald noted that SoundThinking showed progress on key AI product initiatives and maintained strong customer retention during the quarter. The firm’s revised price target reflects lower expectations for fiscal year 2026.
Cantor Fitzgerald remains positive on SoundThinking’s long-term outlook, viewing the stock as an attractive value play at 0.9x FY26 EV/Sales while forecasting double-digit growth next year.
In other recent news, SoundThinking reported its third-quarter earnings, revealing a non-GAAP earnings per share of ($0.16), which fell short of analysts’ expectations of ($0.06). The company’s revenue also declined by 4% year-over-year to $25.1 million, missing the consensus forecast of $28.4 million. These results indicate the company’s struggle to meet market expectations, as highlighted in their earnings call. Following the earnings announcement, Citizens lowered its price target for SoundThinking from $19 to $16, although it maintained a Market Outperform rating. This adjustment reflects the impact of delays in deals that the company is currently facing. Analysts from Citizens continue to express confidence in the company’s long-term prospects despite the recent earnings miss. SoundThinking’s stock showed a slight increase in after-hours trading, hinting at mixed investor reactions influenced by the company’s strategic initiatives and product innovations. These developments provide a snapshot of the current challenges and opportunities facing SoundThinking.
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