Talkspace (TALK) AI Stock Analysis

• Market Cap: $476.85M
• Dividend Yield: N/A
• Average Volume (3M): 1.98M
• Price to Earnings (P/E): 170.7
• Beta (1Y): 1.22
• Revenue Growth: 25.02%
• EPS Growth: N/A
• Country: US
• Employees: 521
• Sector: Healthcare
• Sector Strength: 59
• Industry: Medical - Care Facilities
• EPS (TTM): 0.00
• Shares Outstanding: 167,315,120
• 10 Day Avg. Volume: 2,089,883
• 30 Day Avg. Volume: 1,978,209
• PEG Ratio: -48.07
• Price to Book (P/B): 750.75
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.56K
• Enterprise Value/Market Cap: 200.50
• Enterprise Value/Revenue: 129.94
• Enterprise Value/Gross Profit: 1.09K
• Enterprise Value/Ebitda: -3.48K
• 1Y Price Target: $5.13
• Price Target Upside: 80.00% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 61 Neutral
• Price Target: ―

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

Medicare and TRICARE Launch

Management's commentary on the new TRICARE population exceeding expectations and positive initial thoughts on its Medicare launch is encouraging.

Payor Segment Performance

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.

Technology and AI Investments

Positive updates on new technology functionality, AI investments, and focus on quality care should continue to differentiate Talkspace versus in-network and D2C solutions.

Negative Factors

Consumer Revenue Decline

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

Guidance Expectations

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

Revenue Impact

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

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 experiencing revenue growth and improving cash flow, which is crucial for future expansion. Yet, the company struggles with profitability, as indicated by negative net margins and ROE. Strong liquidity and no debt enhance financial stability, but ongoing cost management is needed to boost shareholder returns.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
194.36M	187.59M	150.04M	119.57M	113.67M	76.19M
	Gross Profit
87.39M	85.84M	74.38M	60.34M	66.77M	49.84M
	EBIT
-3.90M	-4.50M	-23.21M	-77.02M	-93.92M	-21.98M
	EBITDA
-3.90M	-4.50M	-22.01M	-78.06M	-84.56M	-21.60M
	Net Income Common Stockholders
-4.32M	-5.74M	-19.18M	-79.67M	-62.74M	-22.37M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
108.35M	117.81M	123.91M	138.54M	198.26M	13.25M
	Total Assets
134.25M	138.68M	142.22M	156.25M	223.61M	32.87M
	Total Debt
0.00	0.00	0.00	500.00K	0.00	111.28M
	Net Debt
-60.08M	-76.69M	-123.91M	-138.04M	-198.26M	98.03M
	Total Liabilities
20.83M	21.28M	23.57M	28.72M	31.33M	131.77M
	Stockholders Equity
113.42M	117.39M	118.65M	127.54M	192.27M	-98.90M
Cash Flow		Free Cash Flow
14.24M	6.26M	-16.54M	-61.43M	-66.37M	-16.24M
	Operating Cash Flow
13.86M	11.70M	-16.39M	-61.08M	-65.71M	-15.18M
	Investing Cash Flow
-55.37M	-46.73M	-141.00K	-317.00K	-663.00K	-11.30M
	Financing Cash Flow
-18.69M	-12.19M	1.90M	1.68M	251.38M	94.00K

Talkspace Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.85
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 2.85 is below the 20-day moving average (MA) of 3.08, below the 50-day MA of 2.99, and below the 200-day MA of 2.92, indicating a bearish trend. The MACD of 0.01 indicates Positive momentum. The RSI at 41.27 is Neutral, neither overbought nor oversold. The STOCH value of 14.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TALK.

Talkspace Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VMD	75 Outperform	$262.83M	22.29	9.79%	―	19.97%	17.21%
TALK	61 Neutral	$476.85M	170.66	2.52%	―	25.02%	―
HCAT	61 Neutral	$264.14M	―	-19.80%	―	4.88%	37.87%
DH	57 Neutral	$534.14M	―	-86.36%	―	-3.04%	-152.59%
Sector *	54 Neutral	$5.38B	3.27	-45.10%	3.30%	16.81%	0.02%
MNMD	40 Neutral	$541.72M	―	-37.07%	―	―	26.24%
SANA	33 Underperform	$584.19M	―	-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.