Here’s What Drove SoundThinking (SSTI) Stock Higher

Soumya Eswaran

Wed, Apr 30, 2025, 7:41 AM 3 min read

Conestoga Capital Advisors, an asset management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets started the year with a rally due to optimism about a strong economy and expectations of moderating inflation and lower interest rates. However, concerns over slowing earnings from major Technology companies, geopolitical tensions, and an upcoming announcement on tariffs led to a sharp decline in equities by the end of the first quarter. Investors sought safety, driving U.S. Treasury yields down. The Conestoga Small Cap Composite returned -11.35% (net) in the first quarter compared to the Russell 2000 Growth Index’s -11.12% return. The Conestoga SMid Cap Composite returned -5.73% compared to the Russell 2500 Growth Index’s -10.80% return. The Conestoga Micro-Cap Composite returned -8.24% vs the Russell Microcap Growth Index’s return of -17.75%. Finally, the Conestoga Mid Cap Composite returned 0.96% (net), compared to the Russell Midcap Growth Index’s -7.12% return. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its first-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as SoundThinking, Inc. (NASDAQ:SSTI). SoundThinking, Inc. (NASDAQ:SSTI) is a public safety technology company. The one-month return of SoundThinking, Inc. (NASDAQ:SSTI) was -3.92%, and its shares gained 19.39% of their value over the last 52 weeks. On April 29, 2025, SoundThinking, Inc. (NASDAQ:SSTI) stock closed at $15.95 per share with a market capitalization of $202.024 million.

Conestoga Capital Advisors stated the following regarding SoundThinking, Inc. (NASDAQ:SSTI) in its Q1 2025 investor letter:

"SoundThinking, Inc. (NASDAQ:SSTI) develops and sells a gunfire detection system to city governments around the world for the purpose of reducing gun violence and crime. During the quarter, SSTI received news that a large NYC contract was renewed, driving the stock higher. Also, the city of Chicago put out an RFP for a gun detection system and SSTI continued to see strong interest in its product offering."

An aerial view of a city showing the presence of public safety solutions such as Shot Spotter All in One.

SoundThinking, Inc. (NASDAQ:SSTI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held SoundThinking, Inc. (NASDAQ:SSTI) at the end of the fourth quarter, compared to 8 in the third quarter. SoundThinking, Inc.'s (NASDAQ:SSTI) fourth quarter revenue decreased by 10% year-over-year to $23.4 million. While we acknowledge the potential of SoundThinking, Inc. (NASDAQ:SSTI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.