We feel now is a pretty good time to analyse Talkspace, Inc.'s (NASDAQ:TALK) business as it appears the company may be on the cusp of a considerable accomplishment. Talkspace, Inc. operates as a virtual behavioral healthcare company. The US$391m market-cap company posted a loss in its most recent financial year of US$80m and a latest trailing-twelve-month loss of US$36m shrinking the gap between loss and breakeven. The most pressing concern for investors is Talkspace's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Talkspace is bordering on breakeven, according to the 2 American Healthcare analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$17m in 2025. Therefore, the company is expected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 74% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won't go into details of Talkspace's upcoming projects, however, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there's one aspect worth mentioning. Talkspace currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are key fundamentals of Talkspace which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Talkspace, take a look at Talkspace's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:
- Valuation: What is Talkspace worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Talkspace is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Talkspace's board and the CEO's background.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.