11 Best Quality Penny Stocks to Buy According to Hedge Funds

5. Talkspace, Inc. (NASDAQ:TALK)

Revenue CAGR in the last 5 years: 40.89%

Net profit margin: 0.61%

Number of Hedge Fund Holders: 24

​​​Talkspace, Inc. (NASDAQ:TALK) is a virtual behavioral healthcare company based in the US that provides online therapy and psychiatry services through a digital platform. The company’s platform makes it easy for individuals, couples, and teens to receive therapy and medication management via text, audio, and video messaging. The TALK’s competitive advantage lies in its partnerships with major health plans and physicians to make sure that its service is accessible to more than 130 million people across most US states.

Talkspace, Inc. (NASDAQ:TALK) achieved strong financial results in 2024, with revenue growing 25% to $187.6 million and session volume increasing 45%. The company demonstrated significant profitability improvements, achieving a $20.5 million EBITDA improvement from a $13.5 million loss in 2023 to a $7 million gain in 2024 while reducing operating expenses by $7 million. The company ended 2024 with a robust balance sheet containing $118 million in cash and cash equivalents with zero debt. Looking ahead to 2025, management revenue projections represent 21% YoY growth at the midpoint, and adjusted EBITDA projections represent a 144% YoY increase at the midpoint.

Talkspace, Inc. (NASDAQ:TALK) has successfully transformed from a consumer subscription-only model to a Payor-focused approach, expanding its total covered lives to 179 million people. The company’s reach now extends beyond commercially insured adults to include teens, seniors through Medicare, and active military members and their dependents. The company maintains a curated network of 6,000 experienced licensed providers across all 50 states, focusing on over 150 different areas of expertise. With recent expansions into Medicare coverage across 48 states and TRICARE coverage for military personnel, along with various strategic partnerships, TALK has positioned itself as a comprehensive solution in the virtual mental health care space. Both short and long-term guidance offered by management is compelling, which makes TALK one of the best penny stocks to consider in 2025.