Critical Review: Talkspace (NASDAQ:TALK) vs. InnovAge (NASDAQ:INNV)

Talkspace (NASDAQ:TALK) and InnovAge (NASDAQ:INNV) are both small-cap medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.

Analyst Recommendations

This is a summary of current recommendations for Talkspace and InnovAge, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Talkspace	0	1	0	0	2.00
InnovAge	0	0	0	0	N/A

Talkspace currently has a consensus price target of $1.00, indicating a potential downside of 43.18%. InnovAge has a consensus price target of $8.00, indicating a potential upside of 13.48%. Given InnovAge’s higher possible upside, analysts plainly believe InnovAge is more favorable than Talkspace.

Institutional and Insider Ownership

46.4% of Talkspace shares are owned by institutional investors. Comparatively, 12.2% of InnovAge shares are owned by institutional investors. 18.4% of Talkspace shares are owned by company insiders. Comparatively, 0.3% of InnovAge shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Talkspace has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, InnovAge has a beta of 0.16, suggesting that its stock price is 84% less volatile than the S&P 500.

Valuation and Earnings

This table compares Talkspace and InnovAge’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Talkspace	$119.57 million	2.45	-$79.67 million	($0.30)	-5.87
InnovAge	$688.09 million	1.39	-$40.67 million	($0.31)	-22.74

InnovAge has higher revenue and earnings than Talkspace. InnovAge is trading at a lower price-to-earnings ratio than Talkspace, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Talkspace and InnovAge’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Talkspace	-38.70%	-35.11%	-29.10%
InnovAge	-5.91%	-12.93%	-7.17%

Summary

InnovAge beats Talkspace on 6 of the 11 factors compared between the two stocks.

About Talkspace

Talkspace, Inc. operates as a virtual behavioral healthcare company. The company offers psychotherapy and psychiatry services through its platform to individuals, enterprises, and health plans through both business-to-business and business-to-consumer channels. It provides text, audio, and video-based psychotherapy from licensed therapists. The company offers Talkspace for Business for employees to access its platform services on a benefit plan paid by the employer; and Talkspace Employee Assistance Program (EAP) and Talkspace Behavioral Health plan, that provides online therapy to employees through EAP and behavioral health benefits. Talkspace, Inc. was founded in 2012 and is based in New York, New York.

About InnovAge

InnovAge Holding Corp. manages and provides a range of medical and ancillary services for seniors in need of care and support to live independently in their homes and communities. It manages its business through Program of All-Inclusive Care for the Elderly (PACE) approach. The company offers in-home care services consisting of skilled, unskilled, and personal care; in-center services, such as primary care, physical therapy, occupational therapy, speech therapy, dental services, mental health and psychiatric services, meals, and activities; transportation to the PACE center and third-party medical appointments; and care management. As of June 30, 2022, it served approximately 6,650 PACE participants in the United States; and operates 18 PACE centers in Colorado, California, New Mexico, Pennsylvania, and Virginia. The company was formerly known as TCO Group Holdings, Inc. and changed its name to InnovAge Holding Corp. in January 2021. InnovAge Holding Corp. was founded in 2007 and is headquartered in Denver, Colorado.