PM Images/DigitalVision via Getty Images Listen here or on the go via Apple Podcasts and Spotify Raul Shah from DocShah Financial shares why he's a value investor (0:30) Tax gain harvesting and more tax takeaways for investors (5:45) Risk tolerance and risk capacity (10:40) Hims & Hers, UnitedHealth, and Gambling.com (17:45) Risks to each stock (31:20) Transcript Rena Sherbill: Very happy to welcome back Raul Shah from DocShah Financial to Investing Experts. Welcome back to the show, Raul. Raul Shah: ...

Financial Performance - For the year ended December 31, 2025, Talkspace's revenues increased to $228.9 million, up from $187.6 million in 2024, representing a growth of approximately 22%[282] - Total revenue increased by $41.3 million, or 22.0%, to $228.9 million for the year ended December 31, 2025, primarily due to a 37.9% increase in Payor revenue[314] - Payor revenue reached $171.5 million, up from $124.3 million, driven by a 31.5% increase in completed Payor sessions[314] - Consumer revenue decreased by $7.3 million, or 29.5%, to $17.5 million, primarily due to a 30.0% decline in Consumer active members[314] - Net income increased by $6.6 million, or 578.8%, to $7.8 million for the year ended December 31, 2025[312] - Adjusted EBITDA rose to $15.8 million for the year ended December 31, 2025, compared to $7.0 million for the year ended December 31, 2024[328] Customer Metrics - The number of completed sessions related to Payor customers rose to 1,617,000 in 2025, compared to 1,229,200 in 2024, indicating a growth of about 31.6%[282] - As of December 31, 2025, the number of health plan customers increased to 35, up from 27 in 2024, while the number of enterprise customers decreased to 159 from 188[297] - The company reported approximately 5,000 active Consumer members as of December 31, 2025, down from 7,200 in 2024, reflecting a decline of about 30.6%[282] - Unique Payor active members during the fourth quarter of 2025 were 124.1 thousand, compared to 95.7 thousand in the same period of 2024, showing an increase of approximately 29.6%[297] Mergers and Acquisitions - The pending merger with Universal Health Services, Inc. will result in each share of Talkspace common stock being converted into $5.25 in cash, with the transaction expected to close in Q3 2026[284][287] - Talkspace acquired Wisdo Health on October 1, 2025, enhancing its ability to address loneliness and isolation, which affects nearly half of U.S. adults[291] Expenses and Costs - Cost of revenue, excluding depreciation and amortization, increased by $29.2 million, or 28.8%, to $130.5 million, primarily due to a 21.7% increase in hours worked by therapists[315] - Research and development expenses decreased by $0.7 million, or 7.2%, to $9.5 million, mainly due to a reduction in employee-related costs[316] - The company anticipates incurring significant transaction-related costs associated with the merger, impacting its financials in fiscal year 2026[288] Cash Flow and Capital Position - As of December 31, 2025, the company maintained a strong capital position with $92.6 million in cash and cash equivalents[329] - Net cash provided by operating activities was $8.5 million for the year ended December 31, 2025, compared to $11.7 million for the previous year[334] - The company anticipates being able to fund its cash needs for at least the next 12 months using available cash and cash equivalents[331] - Net cash used in investing activities decreased to $28.9 million for the year ended December 31, 2025, from $46.7 million in 2024, primarily due to higher proceeds from maturities of marketable securities[335] - Net cash used in financing activities increased to $19.0 million for the year ended December 31, 2025, compared to $12.2 million in 2024, driven by increased repurchases of common stock[336] - As of December 31, 2025, the company had no short-term or long-term debt and only a non-material long-term operating lease for office space[337] Risk Factors - Inflation has not materially affected Talkspace's business for the years ended December 31, 2025, and 2024, but future inflationary pressures could impact costs[293] - The company does not believe that a hypothetical increase or decrease of 100 basis points in interest rates would materially affect its financial condition or results of operations[354] - A substantial majority of the company's revenue has been denominated in U.S. dollars, indicating limited exposure to foreign currency exchange risk[355] - The company has not incurred any material costs related to indemnifications for breaches of customer data or intellectual property rights[339] - There are no material legal proceedings or claims as of December 31, 2025, although future legal matters may arise in the normal course of business[338] Development and Compliance - Talkspace's research and development expenses include costs related to software development and compliance, which are critical for future product enhancements[303] - The company capitalizes certain costs related to the development of its proprietary virtual behavioral health platform, amortizing eligible costs over an estimated useful life of 3 years[344] - Stock-based compensation costs are measured at fair value on the grant date and recognized as expense over the requisite service period[345]

Core Viewpoint - Kahn Swick & Foti, LLC is investigating the proposed sale of Talkspace, Inc. to Universal Health Services, Inc. to assess the adequacy of the sale price and process [1] Group 1: Proposed Sale Details - Talkspace shareholders are set to receive $5.25 in cash for each share they own as part of the proposed transaction [1] - The investigation aims to determine if this consideration undervalues Talkspace and whether the process leading to this valuation was adequate [1] Group 2: Legal Rights and Contact Information - Investors who believe the transaction undervalues Talkspace are encouraged to discuss their legal rights with Kahn Swick & Foti, LLC [1] - Contact details for Kahn Swick & Foti, LLC include a toll-free number (855-768-1857) and an email address for inquiries [1]

Core Insights - Universal Health Services, Inc. (UHS) has agreed to acquire Talkspace, Inc. for $5.25 per share, with a total enterprise value of approximately $835 million, to be financed through existing credit facilities [2][10]. Acquisition Details - The acquisition is expected to close in the third quarter of 2026 [3][10]. - Talkspace operates a nationwide virtual behavioral health platform with over 6,000 licensed clinicians, providing services to more than 200 million people [4][10]. - In 2025, Talkspace generated revenues of $229 million and conducted over 1.6 million therapy and psychiatry sessions [4][10]. Strategic Objectives - UHS aims to address staffing limitations in behavioral health by integrating Talkspace's digital capabilities with its existing facilities, creating a hybrid care model that combines virtual, outpatient, and inpatient services [3][5]. - This initiative is expected to enhance patient access and care continuity, reinforcing UHS's behavioral health platform, which is a significant revenue contributor [3][5]. Financial Position - As of the end of 2025, UHS's long-term debt was $4 billion, reduced from $4.46 billion in 2024, while cash and cash equivalents increased to $137.8 million from $126 million [6]. - UHS had an available borrowing capacity of $889 million under its $1.3 billion revolving credit facility at the end of the fourth quarter [6]. Market Performance - UHS shares have increased by approximately 10.5% over the past year, underperforming the industry average gain of 39.3% during the same period [7].

Core Insights - Wall Street analysts are adjusting their ratings and price targets for several companies, including Novo Nordisk, Korn Ferry, Jefferies Financial Group, and Talkspace, reflecting concerns over pipeline performance, valuation compression, and acquisition outcomes [1][2]. Novo Nordisk (NVO) - TD Cowen downgraded Novo Nordisk from Buy to Hold, reducing the price target from $45 to $42, citing disappointing clinical data for CagriSema and lagging prescriptions for Ozempic [1]. - The stock is currently trading at $39.78, down 21.82% year-to-date and 53.14% over the past year, with a 52-week high of $80.53 [2]. - Despite strong Q4 2025 revenue of $45.32 billion, management has guided for a sales decline of 5% to 13% in 2026 due to pricing pressures and competition [1][2]. Korn Ferry (KFY) - Truist maintained a Buy rating on Korn Ferry but cut the price target from $88 to $75, attributing the reduction to lower industry multiples rather than fundamental concerns [1]. - The company reported Q3 FY2026 revenue of $725.04 million, up 7.2% year-over-year, and adjusted diluted EPS of $1.28, exceeding estimates [2]. - The stock is trading at $62.63, down 5.13% year-to-date, with a consensus price target of $79, indicating it is viewed as undervalued [1][2]. Jefferies Financial Group (JEF) - Morgan Stanley downgraded Jefferies from Overweight to Equal Weight, setting a price target of $49, reflecting concerns over credit and advisory softness [1]. - The stock is currently at $38.16, down 37.95% year-to-date, and has missed EPS estimates in its most recent quarter [2]. - Despite a strong FY2025 performance with investment banking net revenues up 20%, legal uncertainties related to First Brands litigation are impacting sentiment [1][2]. Talkspace (TALK) - KeyBanc downgraded Talkspace to Sector Weight from Buy following its acquisition by Universal Health Services for $5.25 per share, which removes investment upside and downside risk [1]. - The stock is trading at $5.12, reflecting a 41.05% increase year-to-date as the acquisition premium has been factored in [2]. - The company reported Q4 2025 revenue of $63.0 million, growing 29.3% year-over-year, and ended the year debt-free with approximately $93 million in cash and securities [2].

Core Viewpoint - Monteverde & Associates PC is investigating the proposed sale of Talkspace, Inc. to Universal Health Services, Inc., where Talkspace shareholders would receive $5.25 per share in cash, raising questions about the fairness of the deal [1]. Group 1: Company Overview - Monteverde & Associates PC is recognized as a Top 50 Firm in the 2025 ISS Securities Class Action Services Report and has recovered millions for shareholders [1]. - The firm is headquartered in the Empire State Building, New York City, and specializes in class action securities litigation [2]. Group 2: Transaction Details - The proposed transaction involves Talkspace shareholders receiving $5.25 per share in cash as part of the sale to Universal Health Services, Inc. [1]. - The investigation aims to determine whether this offer is fair for the shareholders of Talkspace [1].

Core Viewpoint - Ademi LLP is investigating Talkspace, Inc. for potential breaches of fiduciary duty and other legal violations related to its transaction with Universal Health Services, focusing on whether shareholders are receiving a fair price [1] Group 1: Transaction Details - Talkspace shareholders will receive $5.25 per share in the transaction [1] - The enterprise value of the transaction is approximately $835 million [1] Group 2: Board Conduct and Shareholder Rights - The transaction agreement imposes significant penalties on Talkspace for accepting competing bids, which may limit shareholder options [1] - The investigation is centered on the conduct of the Talkspace board of directors and their fulfillment of fiduciary duties to all shareholders [1]

Upgrades - TD Cowen upgraded Iqvia (IQV) to Buy from Hold with a price target of $213, increased from $174, citing no expected revenue headwinds from AI [2] - Wolfe Research upgraded Brinker (EAT) to Outperform from Peer Perform with a price target of $184, noting that the Chili's unit has "earned value credibility" and traffic has outperformed [2] - Scotiabank upgraded Verizon (VZ) to Outperform from Sector Perform with a price target of $54.50, up from $50.25, after positive management meetings indicating strong momentum in subscriber loading and cost improvements [3] - Argus upgraded AutoZone (AZO) to Buy from Hold with a price target of $4,325, driven by expectations of positive year-over-year profit growth starting in Q3 after two quarters of negative earnings growth [4] - Rothschild & Co Redburn upgraded GE Vernova (GEV) to Buy from Sell with a price target of $1,100, up from $560, due to stronger than expected demand and margins in power and utilities [4] Downgrades - Wolfe Research downgraded Starbucks (SBUX) to Peer Perform from Outperform without a price target, indicating a need for evidence of sustained execution despite emerging positive signs [5] - William Blair downgraded Talkspace (TALK) to Market Perform from Outperform without a price target, following the announcement of its acquisition by Universal Health Services (UHS) for $5.25 per share, totaling $835 million [5] - TD Cowen downgraded Western Alliance (WAL) to Hold from Buy with a price target of $83, citing decreased investor tolerance for future credit events despite idiosyncratic exposures [5] - Bernstein downgraded Brown-Forman (BF.B) to Market Perform from Outperform with a price target of $29, down from $37.50, due to anticipated margin pressures from rising costs of barreled whiskey [5] - Citizens downgraded Marriott Vacations (VAC) to Market Perform from Outperform without a price target, suggesting the board should have considered strategic alternatives given a 60% stock decline over the previous CEO's tenure [5]

Core Viewpoint - Halper Sadeh LLC is investigating whether Talkspace, Inc. is obtaining a fair price for its shareholders in the proposed sale to Universal Health Services, Inc. for $5.25 per share [1] Group 1: Investigation Details - The investigation focuses on potential violations of federal securities laws and breaches of fiduciary duties by Talkspace and its board of directors [1] - Key concerns include whether the best possible price was obtained for shareholders, if the sales process was free of conflicts of interest, and if all material information was disclosed to shareholders [1] Group 2: Legal Representation - Halper Sadeh LLC represents investors globally who have experienced securities fraud and corporate misconduct, aiming to seek increased consideration or additional disclosures on behalf of shareholders [1]

Core Viewpoint - Universal Health Services (UHS) is acquiring Talkspace for $835 million to enhance its offerings in behavioral health services amid increasing demand [1]. Group 1: Acquisition Details - Universal Health Services will pay $5.25 per share for Talkspace, representing a 10.29% premium over the stock's last closing price [2]. - The acquisition has been approved by the boards of both companies and is expected to close in the third quarter of 2026 [4]. Group 2: Company and Market Impact - Talkspace provides virtual mental health services through a network of approximately 6,000 licensed professionals across all 50 U.S. states, Washington, D.C., and Puerto Rico [4]. - At the end of 2025, Talkspace's services were accessible to over 200 million people through various health plans and employee assistance programs [4]. - Talkspace generated $229 million in revenue in 2025, indicating a strong market presence [4].