- 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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