Breakeven On The Horizon For Talkspace, Inc. (NASDAQ:TALK)

Talkspace, Inc. (NASDAQ:TALK) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Talkspace, Inc. operates as a virtual behavioral healthcare company in the United States. The US$312m market-cap company posted a loss in its most recent financial year of US$19m and a latest trailing-twelve-month loss of US$12m shrinking the gap between loss and breakeven. The most pressing concern for investors is Talkspace's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Talkspace

Consensus from 3 of the American Healthcare analysts is that Talkspace is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$8.7m in 2025. The company is therefore projected to breakeven just over a year from today. 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 60% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Talkspace's growth isn’t the focus of this broad overview, though, take into account that typically 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 typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Talkspace to cover in one brief article, but the key fundamentals for the company can all be found in one place – Talkspace's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:

1. 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.
2. 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.
3. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com