Talkspace (TALK) AI Stock Analysis

• Market Cap: $503.62M
• Dividend Yield: N/A
• Average Volume (3M): 1.66M
• Price to Earnings (P/E): 180.2
• Beta (1Y): 1.18
• Revenue Growth: 25.02%
• EPS Growth: N/A
• Country: US
• Employees: 521
• Sector: Healthcare
• Sector Strength: 43
• Industry: Medical - Care Facilities
• EPS (TTM): 0.00
• Shares Outstanding: 167,315,120
• 10 Day Avg. Volume: 1,762,499
• 30 Day Avg. Volume: 1,660,752
• PEG Ratio: N/A
• Price to Book (P/B): 3.79
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 37.85
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $5.13
• Price Target Upside: 70.43% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

Talkspace's stock is moderately rated due to its robust revenue growth and strategic partnerships. However, high valuation, profitability challenges, and neutral technical indicators present concerns. The stock's strength in market expansion and partnerships is offset by its high P/E ratio and declining consumer revenue, necessitating caution.

Positive Factors

Growth opportunities

The recent expansions into FFS Medicare, Medicare Advantage, and TRICARE present material long-term growth opportunities for the organization.

Revenue growth

The strong performance of the Payor segment, which represents roughly 75% of revenue and showed a 33% year-over-year increase, is a key driver of revenue growth.

Strategic initiatives

Management is effectively executing various strategic and operational initiatives aimed at driving sustainable organic growth, enhancing margins, and increasing cash flow.

Negative Factors

Market expectations

The initial decline in shares may have been due to the market's expectation of a guidance raise, which was not realized.

Revenue challenges

Revenue was negatively impacted by declines in the B2C and DTE business segments, with B2C revenue down 33% year-over-year.

Revenue shortfall

Consumer revenue declined 32% and came in 6.8% below estimate, indicating it has not yet found a true bottom.

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

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.

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.

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.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 3.01
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TALK, the sentiment is Neutral. The current price of 3.01 is below the 20-day moving average (MA) of 3.07, above the 50-day MA of 2.87, and above the 200-day MA of 2.80, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 50.65 is Neutral, neither overbought nor oversold. The STOCH value of 34.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TALK.

Talkspace Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VMD	69 Neutral	$266.79M	22.63	9.79%	―	19.97%	17.21%
HCAT	63 Neutral	$271.44M	―	-19.80%	―	4.88%	37.87%
TALK	61 Neutral	$503.62M	180.24	2.52%	―	25.02%	―
DH	58 Neutral	$481.45M	―	-86.36%	―	-3.04%	-152.59%
Sector *	52 Neutral	$5.19B	3.04	-44.20%	2.82%	16.59%	-0.39%
MNMD	40 Neutral	$529.63M	―	-37.07%	―	―	26.24%
SANA	33 Underperform	$378.93M	―	-71.44%	―	―	19.94%

Talkspace Corporate Events

Talkspace Reports Strong Revenue Growth in 2024

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.