Behavioral Healthcare Firm Talkspace Stock Falls As CEO Leaves, Analyst Cut Ratings

Baird has downgraded virtual behavioral healthcare company Talkspace Inc TALK to Neutral from Outperform and lowered the price target to $3 from $10.
Analyst Vikram Kesavabhotla cited its disappointing quarter and lowered guidance and management turnover leading to an uncertain path.
He still thinks there is underlying value but finds it challenging to continue recommending the name with conviction.
Citi has downgraded Talkspace to Neutral from Buy with a price target of $3.50, down from $7, following the "difficult" Q3 and management shakeup.
Analyst Daniel Grosslight says, while this quarter's issues were easily diagnosed as retention issues, product delays, billing difficulties, and low utilization rates, they are not easily remedied.
The analyst believes "it will take some time for a new CEO to the right the ship."
SVB Leerink analyst Stephanie Davis downgraded Talkspace to Market Perform from Outperform.
Talkspace's co-founder and CEO, Oren Frank, decided to step down, effective immediately.
Roni Frank, co-founder and Head of Clinical Services is also stepping down from her role.
Chairman Douglas Braunstein will step in as interim CEO, and the search for a new CEO will start.
Q3 sales of $26.4 million were up 23% Y/Y, but well below the consensus of $31.93 million.
EPS of $0.01, beating the consensus loss of $(0.09), and a turnaround from $(0.20) a year ago.
Price Action: TALK shares are sharply down 36% at $2.17 during the market session on the last check Tuesday.

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