One-glance verdict
Undervalued
$7.84 our estimate vs market $5.49
Wall Street consensus: $9.00 (14.8% higher than our fair-value estimate)
30% below our estimate, below the bear case
Fundamentals snapshot
SoundThinking, Inc.
SSTI · NCM · Technology · Software - Application
Current price
$5.49
52-week range
$5.42 - $12.76
Market cap
$72.27M
Balance sheet
Healthy
-449.21x Concerning
Net cash $972.00K. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
2 Risks
1 rewards · 2 risks
- Reward Free cash flow was positive in 7/10 years.
- Risk Return on equity was -23.7% last year — the company lost money on shareholders' equity.
- Risk Operating margin compressed from -1.7% to -19.0% over 3 years.
What this company does
SoundThinking, Inc.
SoundThinking provides technology to police departments and security teams, with its main product, ShotSpotter, automatically detecting and locating gunshots. The company makes most of its money from selling subscriptions to these tools, which creates recurring revenue (income that is predictable and likely to continue in the future). By offering a whole suite of connected products for public safety, their goal is to become an essential partner that is difficult for customers to replace.
How the company got here
Originally named ShotSpotter, the company was founded in 1996 by a physicist who realized the same technology used to find earthquake epicenters could also pinpoint the location of gunshots. For many years, its main business was selling this gunshot detection system to police departments. A key change happened in 2010 when a new CEO, Ralph Clark, shifted the company to a subscription model (where customers pay a recurring fee for the service), making it more affordable for cities. To better reflect its expansion into a wider range of public safety technologies, the company rebranded as SoundThinking in April 2023.
What it actually does
SoundThinking provides technology and data services to law enforcement agencies and public safety officials to help them respond to, investigate, and prevent crime. Think of it as a technology toolkit for police departments and other safety organizations. Their main products are sold as subscriptions, which means customers pay a regular fee to access the services, much like a Netflix subscription. The company's tools are bundled into a suite called the SafetySmart Platform, which helps law enforcement and community groups work together.
SafetySmart Platform
This is the company's main offering, an integrated suite of software tools for public safety, and it generates the vast majority of the company's revenue through subscriptions. Instead of one single business, SoundThinking offers several connected services that law enforcement agencies pay for. These services include ShotSpotter for detecting gunshots, CrimeTracer for searching criminal records, CaseBuilder for managing investigations, and other tools that help police departments manage their resources and solve crimes more efficiently. The company also now offers solutions for security outside of law enforcement, such as weapons detection for corporate campuses and hospitals.
What management is betting on now
Management is focused on expanding beyond its original gunshot detection business by selling more of its newer software and data tools to both existing and new customers. A key part of their strategy is the acquisition (buying other companies) of new technologies, like the 2023 purchase of SafePointe, a company that makes AI-based weapons detection systems. They are also focused on increasing their international presence and growing their customer base to include not just police departments but also universities and private companies. The overall goal is to become an indispensable partner for public safety, offering a wide range of connected services that help law enforcement and communities be safer and more efficient.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$12.44M
FY2024 Q4
$-2.22M
FY2025 Q1
$-1.04M
FY2025 Q2
$-2.66M
FY2025 Q3
$4.87M
FY2025 Q4
$3.69M
FY2026 Q1
$-1.52M
FY2026 Q2
$-8.11M
Revenue
$23.89M
Net income
$-4.75M
Diluted EPS
-0.37
Operating cash flow
$-7.47M
Free cash flow
$-8.11M
Fetching…
Sources
Revenue
$24.18M
Net income
$-7.00M
Diluted EPS
-0.54
Operating cash flow
$207.00K
Free cash flow
$-1.52M
Fetching…
Sources
Revenue
$24.79M
Net income
$-2.77M
Diluted EPS
-0.22
Operating cash flow
$4.49M
Free cash flow
$3.69M
Fetching…
Sources
Revenue
$25.10M
Net income
$-2.04M
Diluted EPS
-0.16
Operating cash flow
$6.23M
Free cash flow
$4.87M
Fetching…
Sources
Revenue
$25.89M
Net income
$-3.12M
Diluted EPS
-0.24
Operating cash flow
$-1.28M
Free cash flow
$-2.66M
Fetching…
Sources
Revenue
$28.35M
Net income
$-1.48M
Diluted EPS
-0.12
Operating cash flow
$-141.00K
Free cash flow
$-1.04M
Fetching…
Sources
Revenue
$23.41M
Net income
$-4.08M
Diluted EPS
-0.32
Operating cash flow
$-859.00K
Free cash flow
$-2.22M
Fetching…
Sources
Revenue
$26.25M
Net income
$-1.44M
Diluted EPS
-0.11
Operating cash flow
$13.69M
Free cash flow
$12.44M
Fetching…
Sources
Is it cheap or expensive?
Fair value $7.84 vs current price $5.49
Wall Street consensus is the average analyst price target: $9.00 (14.8% higher than our fair-value estimate).
Our most-likely fair value is $7.84 a share — about 42.8% above today's price of $5.49, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $972,000 - more cash than debt. Interest coverage -449.2x.
Net debt
$-972.00K
Interest coverage
-449.21x
SoundThinking, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
SSTI
BASELINE
SoundThinking, Inc.
Total debt $5.51M Interest coverage -449.21x This is the baseline the peer rows are being compared against.
Total debt $1.85B Interest coverage -0.66x Neither company has much profit cushion over interest right now.
Total debt $9.62B Interest coverage 8.22x This peer still has a real interest-payment cushion, while SSTI does not.
Total debt $26.55M Interest coverage -11.33x Neither company has much profit cushion over interest right now.
Total debt $23.23M Interest coverage 127.11x This peer still has a real interest-payment cushion, while SSTI does not.
Total debt $436.00K Interest coverage -1,926.43x Neither company has much profit cushion over interest right now.
What you should know
The case for and against SSTI
1 Reward
2 Risks
Rewards
-
Free cash flow was positive in 7/10 years.
Risks
-
Return on equity was -23.7% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from -1.7% to -19.0% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
-28.89x
P/B
1.05x
P/S
0.74x
EV/EBITDA
-15.01x
PEG ratio
0.95x
Profitability
How much profit each dollar creates
Gross margin
51.0%
Operating margin
-19.0%
Net margin
-16.9%
ROE
-23.7%
ROA
-7.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.08x
Current ratio
0.74x
Quick ratio
0.65x
Total debt
$5.51M
Total cash
$6.48M
Growth
How the business has been compounding
Revenue TTM
$97.96M
Revenue 5Y CAGR
15.7%
EPS TTM
-1.29
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$3.46M
Free CF TTM
$4.85M
FCF margin
5.0%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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