A Virtual Therapy Company- Talkspace Inc
Michael Phelps is one of the most decorated athletes in Olympic Sports History, with 28 medals across various competitions. Among many things that I associate with Mr. Phelps, including his athletic achievements, is the courage to be the public ambassador of an online Mental Health platform, Talkspace. The courage to combat the negative stigma and discourse associated with such a fragile issue of consequence and concern. Talkspace Inc Ordinary Shares (NASDAQ: TALK) shares started trading on the NASDAQ on June 23, 2021, and have declined by approximately 34%. With a current Market Capitalization of $900 million and 60,300 active members as of March 31, 2021, a different metric provided in their S-1 registration statement released on July 02, 2021, provides a guide to understanding a unique potential.
On Page 87 of their S-1 Registration Statement, the virtual behavioral health company provides a B2B Eligible Lives Metric at Period End. According to the company, the following metric represents the number of eligible customers through their respective health providers or enterprise clients. As of March 31, 2021, the company registered 41.82 million “eligible lives” compared to 9.57 million “eligible lives” on March 30, 2020. The company highlighted Accenture, Blackstone, Expedia, and Google as some of their more recognizable enterprise clients. As of March 31, 2021, the number of Enterprise Clients increased to 91 from 25 on March 31, 2020. The company generated $76.2 million in revenues for FY 20 vs. $38.2 million in FY 19, with $27.1 million in its most recent quarter ending March 31, 2021. American Well Corporation, Teladoc, Doctor On Demand, MDLive, BetterHelp, Lyra Health, and Ginger are listed as competitors, alongside major players such as Apple, Amazon, Facebook, Verizon, Microsoft, or Walmart. The company identifies a $23 billion domestic addressable market and $130 billion international addressable markets. Interestingly, the current Chief Financial Officer, Mr. Mark Hirschhorn, is a former alumnus of my alma mater, Rutgers University.
A Publicly Traded Car Wash Company
The second company I am adding to my watchlist is a company headquartered out of Tucson, Arizona, called Mister Car Wash Inc (NYSE: MCW). Shares of Mister Car Wash started trading on June 25, 2021, and have returned approximately 9.66% so far.
The Car Wash Brand offering Exterior and Interior Cleaning Services has a Market Capitalization worth $6.3 billion and generated $629.53 million in Net Revenues for the Fiscal Year 2019. As of March 31, 2021, the company had 344 locations and 1.4 million members in 21 states, increasing 429.23% and 3751.44% since 2010.
A review of Mister Cash Wash, Inc.’s S-1 registration statement released on June 2, 2021, highlights that Mr. John Lai has served in the role of President and Chief Executive Officer since June 2013. The company operated 65 locations in Texas, 37 locations in California, and 30 locations in Florida, with my neighbor state of Pennsylvania hosting four sites. I mentioned 1.4 million members earlier because, much like a Netflix or Amazon Prime membership, the company offers an Unlimited Wash Club membership, a monthly subscription plan starting at $19.99. According to the S-1 registration statement, “In 2020, a typical member averaged over 30 visits per year,” with 62% of Total Sales coming from UWC members, compared to 15% in 2010. Additionally, on page 84, the company provides an overview of their Science of Cleaning Technology where, “Mister Car Wash’s science of cleaning helps us reduce freshwater usage by an average of 11% and recycle 33% of water, on average, during the wash process and reduce usage by optimizing water flows and storage.” It is refreshing to hear this from a Car Wash company since Water is a critical component of its over-business model.
I am adding both companies to my watchlist because they offer a unique business model. I find Talkspace Inc Ordinary Shares (NASDAQ: TALK) unique since its created a unique brand since its founding in 2012. Having an accomplished athlete like Michael Phelps as a brand ambassador should provide cadence to increasing acceptance as reflected by an increase in enterprise clients. With Mister Car Wash Inc (NYSE: MCW), I find the business model unique compared to the industry peers who are not publicly traded companies and are still localized to their localities. Plus, being IPOs, good operational performance generally translates to positive stock returns.