Analyzing Inspire Medical Systems (NYSE:INSP) and Talkspace (NASDAQ:TALK)

Talkspace (NASDAQ:TALK) and Inspire Medical Systems (NYSE:INSP) are both small-cap medical companies, but which is the better stock? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Profitability

This table compares Talkspace and Inspire Medical Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Talkspace	0.49%	1.03%	0.88%
Inspire Medical Systems	14.33%	10.35%	8.81%

Volatility and Risk

Talkspace has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Inspire Medical Systems has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500.

Insider & Institutional Ownership

57.4% of Talkspace shares are owned by institutional investors. Comparatively, 94.9% of Inspire Medical Systems shares are owned by institutional investors. 23.5% of Talkspace shares are owned by company insiders. Comparatively, 2.2% of Inspire Medical Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Talkspace and Inspire Medical Systems, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Talkspace	1	7	1	0	2.00
Inspire Medical Systems	2	14	4	1	2.19

Talkspace presently has a consensus price target of $5.56, indicating a potential upside of 6.77%. Inspire Medical Systems has a consensus price target of $81.26, indicating a potential upside of 52.32%. Given Inspire Medical Systems’ stronger consensus rating and higher possible upside, analysts clearly believe Inspire Medical Systems is more favorable than Talkspace.

Earnings & Valuation

This table compares Talkspace and Inspire Medical Systems”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Talkspace	$228.87 million	3.81	$7.79 million	$0.01	521.00
Inspire Medical Systems	$911.98 million	1.69	$145.42 million	$4.49	11.88

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

Summary

Inspire Medical Systems beats Talkspace on 11 of the 15 factors compared between the two stocks.

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.

About Inspire Medical Systems

Inspire Medical Systems, Inc., a medical technology company, focuses on the development and commercialization of minimally invasive solutions for patients with obstructive sleep apnea (OSA) in the United States and internationally. The company offers Inspire system, a neurostimulation technology that provides a safe and effective treatment for moderate to severe OSA. It also develops a novel, closed-loop solution that continuously monitors a patient's breathing and delivers mild hypoglossal nerve stimulation to maintain an open airway. The company was incorporated in 2007 and is headquartered in Golden Valley, Minnesota.