We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can SoundHound Replicate Its Red Lobster Win Across QSR Chains?
Read MoreHide Full Article
Key Takeaways
SOUN deployed AI phone-ordering at Red Lobster to ease workloads and streamline customer calls.
Expanding to other QSRs is complex due to varied menus, POS systems, and service expectations.
SOUN shares rose 48.5% in 3 months, outperforming the broader tech sector and S&P 500.
SoundHound AI’s (SOUN - Free Report) nationwide rollout of its phone-ordering system at Red Lobster has set a strong precedent for AI adoption in the quick-service industry. The deployment showcases how conversational AI can solve one of restaurants’ biggest challenges—handling high call volumes without disrupting in-store service. By ensuring that every customer call is answered instantly and orders flow directly into the POS system, SoundHound’s technology reduces workload pressure and boosts operational consistency.
The bigger question is whether this success can be replicated at scale across QSR brands. Red Lobster provided a high-visibility proving ground, but extending the model to thousands of franchise-based outlets introduces new layers of complexity. Each restaurant chain has distinct menus, POS software, and customer interaction styles, requiring flexible deployment and rigorous training. SoundHound’s previous wins with Applebee’s, Firehouse Subs, and MOD Pizza show encouraging progress, but systemwide consistency remains a hurdle.
If SoundHound can demonstrate that the Red Lobster integration improves accuracy, speed, and customer satisfaction in measurable ways, it could unlock partnerships with other major QSRs looking to modernize operations. The Red Lobster rollout was more than a partnership—it was a demonstration of scalability in live environments, and its replication potential may determine how far SoundHound’s restaurant AI can extend its footprint.
Competitors in the Restaurant AI Race
As SoundHound scales its restaurant partnerships, competitors like Toast (TOST - Free Report) and C3.ai (AI - Free Report) are intensifying their presence in the quick-service automation space. Toast has established itself as a major player in restaurant management technology, integrating ordering, payments, and operations across thousands of outlets. Its growing investment in AI-driven automation aims to streamline kitchen workflows and enhance order accuracy. Yet, Toast remains primarily focused on POS and back-end analytics, while SoundHound’s Red Lobster deployment showcases real-time conversational ordering and customer engagement capabilities.
Meanwhile, C3.ai continues to advance its enterprise AI solutions into the hospitality sector, offering predictive insights and process automation tools that improve efficiency and decision-making. However, C3.ai lacks the conversational interface expertise that differentiates SoundHound in voice-driven QSR automation. Both Toast and C3.ai are formidable competitors, but SoundHound’s strength lies in seamlessly blending AI voice technology with operational execution across restaurant chains.
SOUN’s Price Performance, Valuation and Estimates
SoundHound shares have gained 48.5% in the past three months against the Zacks Computers - IT Services industry’s 3.9% decline. The SOUN stock has also outperformed the broader Computer and Technology sector and the S&P 500.
SOUN’s Price Performance
Image Source: Zacks Investment Research
In terms of its forward 12-month price-to-sales ratio, SOUN is trading at 35.36, up from the industry’s 17.23.
Image Source: Zacks Investment Research
Over the past 60 days, the Zacks Consensus Estimate for SOUN’s 2025 loss per share has remained unchanged at 13 cents. The estimated figure indicates an improvement from the year-ago loss of $1.04 per share.
Image: Bigstock
Can SoundHound Replicate Its Red Lobster Win Across QSR Chains?
Key Takeaways
SoundHound AI’s (SOUN - Free Report) nationwide rollout of its phone-ordering system at Red Lobster has set a strong precedent for AI adoption in the quick-service industry. The deployment showcases how conversational AI can solve one of restaurants’ biggest challenges—handling high call volumes without disrupting in-store service. By ensuring that every customer call is answered instantly and orders flow directly into the POS system, SoundHound’s technology reduces workload pressure and boosts operational consistency.
The bigger question is whether this success can be replicated at scale across QSR brands. Red Lobster provided a high-visibility proving ground, but extending the model to thousands of franchise-based outlets introduces new layers of complexity. Each restaurant chain has distinct menus, POS software, and customer interaction styles, requiring flexible deployment and rigorous training. SoundHound’s previous wins with Applebee’s, Firehouse Subs, and MOD Pizza show encouraging progress, but systemwide consistency remains a hurdle.
If SoundHound can demonstrate that the Red Lobster integration improves accuracy, speed, and customer satisfaction in measurable ways, it could unlock partnerships with other major QSRs looking to modernize operations. The Red Lobster rollout was more than a partnership—it was a demonstration of scalability in live environments, and its replication potential may determine how far SoundHound’s restaurant AI can extend its footprint.
Competitors in the Restaurant AI Race
As SoundHound scales its restaurant partnerships, competitors like Toast (TOST - Free Report) and C3.ai (AI - Free Report) are intensifying their presence in the quick-service automation space. Toast has established itself as a major player in restaurant management technology, integrating ordering, payments, and operations across thousands of outlets. Its growing investment in AI-driven automation aims to streamline kitchen workflows and enhance order accuracy. Yet, Toast remains primarily focused on POS and back-end analytics, while SoundHound’s Red Lobster deployment showcases real-time conversational ordering and customer engagement capabilities.
Meanwhile, C3.ai continues to advance its enterprise AI solutions into the hospitality sector, offering predictive insights and process automation tools that improve efficiency and decision-making. However, C3.ai lacks the conversational interface expertise that differentiates SoundHound in voice-driven QSR automation. Both Toast and C3.ai are formidable competitors, but SoundHound’s strength lies in seamlessly blending AI voice technology with operational execution across restaurant chains.
SOUN’s Price Performance, Valuation and Estimates
SoundHound shares have gained 48.5% in the past three months against the Zacks Computers - IT Services industry’s 3.9% decline. The SOUN stock has also outperformed the broader Computer and Technology sector and the S&P 500.
SOUN’s Price Performance
Image Source: Zacks Investment Research
In terms of its forward 12-month price-to-sales ratio, SOUN is trading at 35.36, up from the industry’s 17.23.
Image Source: Zacks Investment Research
Over the past 60 days, the Zacks Consensus Estimate for SOUN’s 2025 loss per share has remained unchanged at 13 cents. The estimated figure indicates an improvement from the year-ago loss of $1.04 per share.
Image Source: Zacks Investment Research
SOUN currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.