ShotSpotter (SSTI) Stock Forecast & Price Target

SoundThinking Inc. has raised its FY25 revenue guidance to $111-113 million, indicating a year-over-year growth rate of 10%, along with anticipated improvements in profit margins. The company's strong cash generation, bolstered by an over $70 million allocation towards acquisitions and share repurchases in the last six years, underscores its financial robustness and capacity for strategic expansion. Additionally, SoundThinking's continued focus on diversifying its revenue streams and its position as a market leader in gunshot detection position it favorably within an emerging and increasingly important sector.

SoundThinking experienced a disappointing financial performance in 4Q24, reporting revenues of $23.4 million, a 10% decline year-over-year, and falling short of the FactSet consensus estimate of $26.7 million. This revenue drop was partly attributed to a $3.5 million delay from two contracts with the NYPD, which raises concerns over potential contract cancellations and the company's ability to secure timely renewals. Additionally, ongoing negative press and costly litigation regarding a defamation lawsuit further exacerbate SoundThinking's operational challenges, signalling heightened risks related to technological changes and competition within the public safety technology sector.