Talkspace initiated with an Overweight at KeyBanc

KeyBanc initiated coverage of Talkspace (TALK) with an Overweight rating and $4.50 price target The firm expects sales growth of 20%-25%, driven mainly by further expansion into payor networks and continued margin expansion from scale and operating leverage. It sees Talkspace’s shift away from consumer cash pay to business-to-business as a key part of its story given the company’s acceptance of insurance “not only drives higher patient retention, but also lowers customer acquisition costs, resulting in less volatility and expanding margins.”