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Talkspace (TALK)
NASDAQ:TALK
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Talkspace
(NASDAQ:TALK)
59Neutral
Positive Factors
Growth Prospects
Talkspace is expected to have 20%+ organic top-line growth through 2026, supporting a price target of $5 and an Outperform rating.
Market Position
TALK was the most preferred in-network behavioral health vendor among respondents compared to peers.
Partnerships
The recent Amazon collaboration is expected to drive higher engagement by converting more covered lives into active users, improving the capture rate.
Negative Factors
Financial Performance
4Q revenue of $48.7M slightly missed consensus of $49.8M.
Guidance
Guidance for 2025 revenue and adjusted EBITDA were below bullish expectations.
Utilization Rates
Utilization remains key to driving topline growth, and there is a need for a faster rate of expansion in capture and utilization rates.
Talkspace (TALK) vs. S&P 500 (SPY)
Market Cap
$450.57M
Dividend YieldN/A
Average Volume (3M)2.28M
Price to Earnings (P/E)424.2
Beta (1Y)1.20
Revenue Growth25.02%
EPS GrowthN/A
CountryUS
Employees521
SectorHealthcare
Sector Strength76
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)<0.01
Shares Outstanding168,437,260
10 Day Avg. Volume1,668,716
30 Day Avg. Volume2,282,626
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.51
Price to Cash Flow (P/CF)28.90
P/FCF Ratio28.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.00Price Target Upside90.11% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Talkspace Business Overview & Revenue Model
Company DescriptionTalkspace, Inc. operates as a virtual behavior healthcare company. It delivers healthcare through encrypted web and mobile platform. The company offers treatment options for every need, including psychiatry or adolescent, individual, or couples therapy. The members can send text, video, and voice messages to their therapists and engage in live video sessions. Talkspace, Inc. is based in New York, New York.
How the Company Makes MoneyTalkspace generates revenue primarily through subscription-based models where users pay for access to therapy services on a weekly, monthly, or quarterly basis. The company offers different subscription tiers that vary based on the type and frequency of therapy sessions, as well as the level of communication with therapists. Additionally, Talkspace partners with employers and health plans to provide mental health services as part of employee assistance programs, which broadens its customer base and revenue streams. These partnerships often involve negotiated contracts that allow companies to offer Talkspace services to their employees as a part of their health benefits. The combination of individual subscriptions and enterprise partnerships forms the backbone of Talkspace's revenue model.
Talkspace Financial Statement Overview
Summary
Talkspace is on a growth trajectory with improving revenue and cash flow metrics. The company has a strong liquidity position and an improving gross profit margin. However, ongoing net losses and negative ROE highlight the need for continued focus on profitability improvements.Income Statement
Talkspace has demonstrated a positive revenue growth trajectory, with a revenue growth rate of approximately 25% from 2023 to 2024, indicating strong demand for its services. However, the company continues to face challenges in profitability, with negative net and EBIT margins suggesting ongoing cost management issues. The gross profit margin has improved, indicating effective cost control at the production level.68
Positive
Balance Sheet
The company's balance sheet reflects strong liquidity with significant cash reserves and no debt in the most recent year, which reduces financial risk. The equity ratio is healthy, highlighting a solid capital structure. However, the return on equity remains negative, pointing to challenges in generating returns for shareholders.55
Neutral
Cash Flow
Talkspace has shown significant improvement in cash flow generation, with free cash flow turning positive in 2024. The operating cash flow to net income ratio is positive, indicating that the company is generating cash from its operations despite net losses. However, there are still risks associated with volatility in investing and financing cash flows.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 187.59M | 150.04M | 119.57M | 113.67M | 76.19M |
| Gross Profit | ||||
| 85.84M | 74.38M | 60.34M | 66.77M | 49.84M |
| EBIT | ||||
| -4.50M | -23.21M | -77.02M | -93.92M | -21.98M |
| EBITDA | ||||
| -4.50M | -22.01M | -78.06M | -84.56M | -21.60M |
| Net Income Common Stockholders | ||||
| -5.74M | -19.18M | -79.67M | -62.74M | -22.37M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 117.81M | 123.91M | 138.54M | 198.26M | 13.25M |
| Total Assets | ||||
| 138.68M | 142.22M | 156.25M | 223.61M | 32.87M |
| Total Debt | ||||
| 0.00 | 0.00 | 500.00K | 0.00 | 111.28M |
| Net Debt | ||||
| -76.69M | -123.91M | -138.04M | -198.26M | 98.03M |
| Total Liabilities | ||||
| 21.28M | 23.57M | 28.72M | 31.33M | 131.77M |
| Stockholders Equity | ||||
| 117.39M | 118.65M | 127.54M | 192.27M | -98.90M |
| Cash Flow | Free Cash Flow | |||
| 6.26M | -16.54M | -61.43M | -66.37M | -16.24M |
| Operating Cash Flow | ||||
| 11.70M | -16.39M | -61.08M | -65.71M | -15.18M |
| Investing Cash Flow | ||||
| -46.73M | -141.00K | -317.00K | -663.00K | -11.30M |
| Financing Cash Flow | ||||
| -12.19M | 1.90M | 1.68M | 251.38M | 94.00K |
Talkspace Technical Analysis
Negative
2.63
Price Trends
3.09
Negative
3.16
Negative
2.68
Negative
Market Momentum
-0.12
Negative
40.75
Neutral
19.04
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TALK, the sentiment is Negative. The current price of 2.63 is below the 20-day moving average (MA) of 2.75, below the 50-day MA of 3.09, and below the 200-day MA of 2.68, indicating a bearish trend. The MACD of -0.12 indicates Negative momentum. The RSI at 40.75 is Neutral, neither overbought nor oversold. The STOCH value of 19.04 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TALK.
Talkspace Risk Analysis
Talkspace disclosed 52 risk factors in its most recent earnings report. Talkspace reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Talkspace Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $271.91M | 25.05 | 9.19% | ― | 22.54% | 8.55% | |
59 Neutral | $450.57M | 424.19 | 0.97% | ― | 25.02% | ― | |
50 Neutral | $281.54M | ― | -18.99% | ― | 3.60% | 44.95% | |
48 Neutral | $6.36B | 1.09 | -49.92% | 2.63% | 17.17% | 0.95% | |
44 Neutral | $381.48M | ― | -63.28% | ― | 0.31% | -99.23% | |
38 Underperform | $418.29M | ― | -68.01% | ― | ― | 26.24% | |
37 Underperform | $333.04M | ― | -99.17% | ― | ― | 19.94% |
* Healthcare Sector Average
Performance Comparison
TALK
Talkspace
2.63
-1.10
-29.49%
MNMD
Mind Medicine
5.43
-5.46
-50.14%
VMD
Viemed Healthcare
6.88
-1.62
-19.06%
HCAT
Health Catalyst
4.01
-2.59
-39.24%
SANA
Sana Biotechnology
1.48
-7.61
-83.72%
DH
Definitive Healthcare Corp
2.51
-5.29
-67.82%
Talkspace Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -31.87% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call highlights strong revenue growth and strategic expansions into Medicare and military segments, along with notable partnerships like Amazon Health Services. However, there are challenges such as a decline in consumer revenue and pressure on gross margins. Overall, the positive achievements, especially in revenue growth and strategic partnerships, outweigh the lowlights.Highlights
Strong Revenue Growth
For the third quarter, revenue increased 23% year-over-year to $47.4 million and adjusted EBITDA was $2.4 million, marking the third consecutive profitable quarter. The largest revenue category, payor, grew 45% year-over-year.
Expansion in Medicare and Military Segments
Talkspace is now CMS approved in approximately 40 states and live in 30 states for Medicare, and launched TRICARE East in August, covering 6 million active duty and retired military lives.
Partnerships and Innovations
Talkspace announced a launch with Amazon Health Services and a new Direct to Enterprise pilot program with the U.S. Navy. They also reported a new partnership with Wisdo, an AI-driven social health platform.
Recognition and Team Success
Talkspace was recognized as one of Crain’s 2024 best places to work in New York City for the second consecutive year.
Lowlights
Decline in Consumer Revenue
Consumer category revenue was $6 million in the third quarter, an 8% sequential decline and a 30% decline year-over-year.
Pressure on Gross Margins
Gross margin for the third quarter was 45.6%, lower than last year due to a revenue mix shift towards payor.
Company Guidance
During the Talkspace Third Quarter 2024 Earnings Conference Call, the guidance provided highlighted several key metrics and strategic initiatives. The company reported a year-over-year revenue increase of 23% to $47.4 million and a third consecutive profitable quarter with an adjusted EBITDA of $2.4 million. The payor segment, Talkspace's largest revenue category, grew by 45% year-over-year, contributing significantly to the company's financial success. The total covered lives expanded to nearly 160 million, a 40% increase from the previous year, and total sessions rose by 38% year-over-year to 316,000. The company announced its expansion into Medicare Advantage and its ongoing efforts to become in-network for all Medicare beneficiaries, currently CMS approved in approximately 40 states. Additionally, Talkspace launched services for military personnel through TRICARE East and initiated a pilot program with the U.S. Navy. Furthermore, Talkspace partnered with Amazon Health Services, enhancing its market reach and discoverability. The company reaffirmed its 2024 guidance, projecting revenue between $185 million and $195 million and maintaining an adjusted EBITDA of $4 million to $8 million for the year.Talkspace Corporate Events
Business Operations and StrategyFinancial Disclosures
Talkspace Reports Strong Revenue Growth in 2024
Positive
Feb 20, 2025
On February 20, 2025, Talkspace reported its financial results for the fourth quarter and full year 2024, highlighting a 25% year-over-year increase in total revenue to $187.6 million and a net income of $1.1 million. The company experienced substantial growth in Payor revenue and continued to focus on strategic market expansion, enhancing its competitive advantage. The fourth quarter saw a 15% increase in revenue to $48.7 million, with improvements in net income and adjusted EBITDA, despite a decline in consumer revenue. The results underscore Talkspace’s strategic shift towards the payor market and its success in broadening access to behavioral health services, positioning the company for continued growth.
Business Operations and StrategyFinancial Disclosures
Talkspace to Present at J.P. Morgan Healthcare Conference
Positive
Jan 15, 2025
Talkspace, Inc. announced its participation in the 43rd Annual J.P. Morgan Healthcare Conference on January 15, 2025, where it will present its investor presentation. The presentation highlights the company’s strategic focus on leveraging non-GAAP financial measures to provide a comprehensive evaluation of its performance. The company aims to enhance its market position by expanding its network and using AI to improve operational efficiencies. The announcement underscores Talkspace’s commitment to providing accessible behavioral health services and its significant presence in the healthcare market, with a network covering 158 million lives.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.