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% and showcasing a strong cash generation capability, with over $70 million allocated towards acquisitions and $14 million in share repurchases over the past six years. The company's improving gross margin profile suggests a healthier bottom line, allowing for strategic initiatives such as tuck-in acquisitions and enhanced shareholder value through buybacks. Additionally, the market leadership in gunshot detection technology, alongside a diversified revenue stream and international expansion efforts, supports a robust profitability outlook, with adjusted EBITDA projected to increase by 107% from FY24 to FY26.

SoundThinking Inc experienced a disappointing fourth quarter in 2024, with revenues of $23.4 million, a decline of 10% year-over-year, and falling short of the FactSet consensus estimate of $26.7 million. A key contributor to the revenue decline was a $3.5 million delay from two contracts with the NYPD, creating uncertainty around future earnings and increasing the risk of contract cancellations or renewals. Furthermore, the company faces mounting negative press and costly litigation related to a defamation lawsuit, alongside several key risks including rapid technological changes and increased competition, which collectively undermine investor confidence.