Head-To-Head Review: Talkspace (NASDAQ:TALK) versus The Pennant Group (NASDAQ:PNTG)

The Pennant Group (NASDAQ:PNTG) and Talkspace (NASDAQ:TALK) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitability.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Pennant Group	$544.89 million	1.28	$13.38 million	$0.54	42.94
Talkspace	$150.04 million	2.60	-$19.18 million	($0.08)	-28.75

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

Profitability

This table compares The Pennant Group and Talkspace’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The Pennant Group	2.86%	13.42%	3.63%
Talkspace	-7.33%	-10.00%	-8.47%

Insider and Institutional Ownership

85.9% of The Pennant Group shares are held by institutional investors. Comparatively, 57.4% of Talkspace shares are held by institutional investors. 5.8% of The Pennant Group shares are held by insiders. Comparatively, 18.4% of Talkspace shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

The Pennant Group has a beta of 2.02, meaning that its stock price is 102% more volatile than the S&P 500. Comparatively, Talkspace has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for The Pennant Group and Talkspace, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Pennant Group	0	1	3	0	2.75
Talkspace	0	1	0	0	2.00

The Pennant Group currently has a consensus target price of $24.50, indicating a potential upside of 5.65%. Talkspace has a consensus target price of $3.00, indicating a potential upside of 30.43%. Given Talkspace’s higher probable upside, analysts plainly believe Talkspace is more favorable than The Pennant Group.

Summary

The Pennant Group beats Talkspace on 11 of the 14 factors compared between the two stocks.

About The Pennant Group

The Pennant Group, Inc. provides healthcare services in the United States. It operates in two segments, Home Health and Hospice Services, and Senior Living Services. The company offers home health services, including clinical services, such as nursing, speech, occupational and physical therapy, medical social work, and home health aide services; and hospice services comprising clinical care, education, and counseling services for the physical, spiritual, and psychosocial needs of terminally ill patients and their families. It also provides senior living services, such as residential accommodations, activities, meals, housekeeping, and assistance in the activities of daily living to seniors who are independent or who require some support. The company operates home health, hospice, and home care agencies, as well as senior living communities throughout Arizona, California, Colorado, Idaho, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin, and Wyoming. The Pennant Group, Inc. was incorporated in 2019 and is headquartered in Eagle, Idaho.

About Talkspace

Talkspace, Inc. operates as a virtual behavioral healthcare company in the United States. The company offers psychotherapy and psychiatry services through its platform to individuals, enterprises, and health plans and employee assistance programs. It provides text, audio, and video-based psychotherapy from licensed therapists. The company offers Talkspace Employee Assistance Program (EAP) and Talkspace Behavioral Health plan (BH) that provides online therapy to members through BH and EAP offerings; and Talkspace for Business for members to access its platform services on a benefit plan paid by the enterprise. It serves its platform through third-party platforms or marketplace, such as Apple App Store and Google Play App Store. Talkspace, Inc. was founded in 2012 and is headquartered in New York, New York.