Talkspace (TALK) AI Stock Analysis

• Market Cap: $651.03M
• Dividend Yield: N/A
• Average Volume (3M): 1.65M
• Price to Earnings (P/E): 197.9
• Beta (1Y): 1.23
• Revenue Growth: 18.37%
• EPS Growth: N/A
• Country: US
• Employees: 521
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): 0.03
• Shares Outstanding: 165,656,130
• 10 Day Avg. Volume: 1,990,552
• 30 Day Avg. Volume: 1,650,615
• PEG Ratio: 0.13
• Price to Book (P/B): 5.22
• Price to Sales (P/S): 2.67
• P/FCF Ratio: -290.17
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 3.22
• Enterprise Value/Gross Profit: 7.49
• Enterprise Value/Ebitda: 69.43
• 1Y Price Target: $6.36
• Price Target Upside: 27.45% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 0.14
• Revenue Forecast (FY): $278.52M

• Rating: 64 Neutral
• Price Target: $5.00 ▲(0.20% Upside)
• Action: Reiterated Date: 02/20/26
• Date: Action: Reiterated 02/20/26

The score is driven primarily by improving—but still mixed—financial performance (strong balance sheet and better cash generation, offset by gross-margin compression and a return to net loss), and a constructive technical uptrend that is tempered by overbought signals. Strong 2026 guidance and Payor-led growth support the outlook, while the very high P/E meaningfully weighs on the overall rating.

Positive Factors

Payor Growth & Contracted Lives

Rapid Payor growth and coverage of 200M+ lives create durable, contracted demand and higher revenue visibility. Payor contracts tend to be multi-period and utilization-driven, supporting recurring revenue, smoother cash flows, and scale advantages versus consumer-only models.

Conservative Balance Sheet (Zero Debt)

A debt-free balance sheet with positive equity materially reduces financial risk and interest-rate sensitivity, giving Talkspace flexibility for strategic investments, M&A, or cushioning operating volatility while preserving access to capital without near-term refinancing pressure.

Improved Cash Generation & Operating Leverage

Doubling of adjusted EBITDA and improved operating-efficiency metrics reflect scalable unit economics and disciplined cost structure. Positive operating and free cash flow in 2024–2025 indicate the business is converting revenue growth into cash, improving durability of profitability over the medium term.

Negative Factors

Gross Margin Compression

Margin compression driven by mix shift toward Payor revenue reduces the gross-profit buffer available to fund SG&A and R&D. Persistently lower gross margins constrain upside from operating leverage and make targets sensitive to provider costs, pricing pressure, and utilization shifts across channels.

Profitability Volatility / Return to Net Loss

A return to net loss despite improving EBITDA highlights volatility between accounting profitability and cash generation. This inconsistency signals remaining execution risk—if non-cash items or one-time gains reverse, the company may struggle to sustain GAAP profitability without continued margin or revenue improvement.

Product & Payer Commercialization Uncertainty

Key structural growth drivers—TalkAI commercialization and deeper Medicare/MA adoption—are unproven at scale. Slow conversion from beta or protracted Medicare penetration would limit the company’s ability to expand addressable market and realize projected operating-leverage gains embedded in guidance.

Talkspace Business Overview & Revenue Model

Company Description

Talkspace, 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 Money

Talkspace 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

Financials show improving stability but not yet durable profitability. Income statement trends are mixed (re-accelerating revenue but weaker gross margin and a return to net loss in 2025), while the balance sheet is strong with zero debt and solid equity. Cash flow quality improved with positive operating cash flow/free cash flow in 2024–2025, though volatility and net-income/FCF divergence in 2025 are watch items.

Income Statement

Revenue growth re-accelerated in 2025 (annual revenue up ~6.7% vs ~0.3% in 2024), showing improving top-line momentum after a period of slower growth. Profitability has also improved materially versus 2021–2023 (when losses were very large), with 2024 slightly profitable and 2025 near break-even at the operating level. However, 2025 slipped back to a net loss (about -2.3% margin) and gross margin has trended down from the 50–65% range (2020–2022) to ~43% in 2025, indicating rising delivery or service costs and leaving less cushion to absorb overhead.

Balance Sheet

The balance sheet is conservatively financed today, with zero debt reported from 2023–2025 and healthy positive equity (~$117M in 2025), which reduces financial risk and interest-rate sensitivity. Assets and equity have been relatively stable the last two years, supporting balance-sheet resilience. The key weakness is returns: shareholder returns are weak/negative recently (2025 return on equity is modestly negative), reflecting the company’s still-incomplete transition to sustained profitability; the historical 2020 snapshot also shows prior balance-sheet stress (negative equity and high debt then), even though that has since been cleaned up.

Cash Flow

Cash generation has improved substantially from heavy cash burn in 2021–2023 to positive operating cash flow and free cash flow in 2024–2025, which is a meaningful quality signal as the business stabilizes. That said, free cash flow was volatile: 2025 free cash flow increased versus 2024 in absolute dollars, but the provided free-cash-flow growth rate is sharply negative, pointing to inconsistency in the run-rate or underlying drivers. Cash flow also does not fully align with net income in 2025 (profitable cash flow despite a net loss), which can be fine but warrants monitoring for working-capital timing effects.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	228.87M	187.59M	150.04M	119.57M	113.67M
Gross Profit	98.35M	85.84M	74.38M	60.34M	66.77M
EBITDA	6.03M	2.10M	-22.01M	-78.06M	-60.72M
Net Income	7.79M	1.15M	-19.18M	-79.67M	-62.74M
Balance Sheet
Total Assets	134.86M	138.68M	142.22M	156.25M	223.61M
Cash, Cash Equivalents and Short-Term Investments	92.59M	117.81M	123.91M	138.54M	198.26M
Total Debt	0.00	0.00	0.00	500.00K	0.00
Total Liabilities	17.85M	21.28M	23.57M	28.72M	31.33M
Stockholders Equity	117.02M	117.39M	118.65M	127.54M	192.27M
Cash Flow
Free Cash Flow	-2.11M	6.26M	-16.54M	-61.43M	-66.37M
Operating Cash Flow	8.53M	11.70M	-16.39M	-61.08M	-65.71M
Investing Cash Flow	-28.88M	-46.73M	-141.00K	-317.00K	-663.00K
Financing Cash Flow	-19.00M	-12.19M	1.90M	1.68M	251.38M

Talkspace Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.99
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TALK, the sentiment is Positive. The current price of 4.99 is above the 20-day moving average (MA) of 4.03, above the 50-day MA of 3.82, and above the 200-day MA of 3.09, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 77.12 is Negative, neither overbought nor oversold. The STOCH value of 80.06 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TALK.

Talkspace Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TALK	64 Neutral	$651.03M	197.95	6.65%	―	18.37%	―
ACHC	62 Neutral	$1.56B	14.30	3.49%	―	4.58%	-61.50%
LFST	61 Neutral	$2.77B	-302.10	-0.62%	―	13.39%	90.55%
CMPS	58 Neutral	$811.22M	-3.08	-205.18%	―	―	-21.62%
MD	54 Neutral	$1.89B	10.19	20.28%	―	-4.21%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
CCRN	48 Neutral	$272.56M	-17.31	-3.76%	―	-22.14%	-787.87%

Talkspace Corporate Events

Talkspace Posts Strong Q4 2025 Growth and Profitability

On February 19, 2026, Talkspace reported fourth-quarter and full-year 2025 results showing strong top-line growth and improved profitability driven by its payor-focused virtual mental health services. Fourth-quarter revenue rose 29% year over year to $63.0 million, net income climbed to $4.8 million, and adjusted EBITDA reached $6.6 million, supported by a 36% increase in completed payor sessions and a 30% rise in unique active payor members.

For full-year 2025, revenue grew 22% to $228.9 million while net income surged to $7.8 million and adjusted EBITDA jumped 127% to $15.8 million, reflecting scaling of the payor channel despite a 30% decline in consumer revenue. Management highlighted record fourth-quarter momentum, ongoing network curation and deeper payor integrations, a solid year-end liquidity position, and the active beta of a proprietary AI agent, underscoring Talkspace’s strengthening position in digital behavioral health and its focus on sustainable, profitable growth.

The most recent analyst rating on (TALK) stock is a Buy with a $6.00 price target. To see the full list of analyst forecasts on Talkspace stock, see the TALK Stock Forecast page.

Talkspace Highlights Growth Strategy at J.P. Morgan Conference

On January 15, 2026, Talkspace presented an investor deck at the 44th Annual J.P. Morgan Healthcare Conference outlining its growth trajectory, market opportunity and evolving product strategy. The company highlighted a large, underpenetrated U.S. behavioral health market, with strong demand across commercial, Medicare, military and teen segments, and reported approximately 24% compound annual revenue growth from 2022 to expected 2025 results, alongside a 115% year-on-year increase in adjusted EBITDA at the midpoint of its 2025 guidance. Management detailed a “systematic formula for growth” centered on diversified marketing, strategic payor and distribution partnerships, and patient journey optimization, which has driven higher checkout conversion and greater early-session engagement. Talkspace also underscored expansion moves including a dedicated psychiatry and medication management program, integration with Amazon Pharmacy, broader coverage for teens in major municipalities and state programs, national Tricare coverage and a direct Navy contract, as well as Medicare-covered services nationwide. Against the backdrop of growing use of general-purpose AI for mental health conversations, the company positioned its proprietary AI agent as a safer, clinically informed alternative designed specifically for mental health support, aiming to differentiate its technology and strengthen its position in the fast-evolving digital mental health landscape.

The most recent analyst rating on (TALK) stock is a Buy with a $4.50 price target. To see the full list of analyst forecasts on Talkspace stock, see the TALK Stock Forecast page.