YB new stock pitches (Tue, Jan 7)

Talkspace (TALK), an online mental health company and former SPAC, presents a compelling investment opportunity despite a recent 40% gain. The company achieved positive adjusted EBITDA in Q3 and expects high-teens to low-twenties EBITDA this year, representing over 50% growth. TALK trades at approximately 20x EV/EBITDA and has a strong balance sheet with 22% of its market cap in net cash. The company recently approved a $25 million share buyback program. As an execution story with inflecting earnings, Talkspace is poised for continued strong growth and increasing cash flow generation. The stock's attractive valuation, coupled with its growth potential and solid financial position, makes it an appealing investment despite its recent price appreciation.

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Nordrest Holding AB (NREST.ST) is a Swedish food service company valued at $120 million, providing catering for various sectors including defense, schools, and hospitals. The company's MRE (Meals Ready to Eat) business, which accounts for 24% of revenue and up to 60% of net income, has been a significant growth driver but faces uncertainty due to potential demand fluctuations. However, Nordrest's core business is growing at 17%, offsetting a recent 20% decline in MRE sales. The company differentiates itself through innovative, tailored menus and strong customer relationships, maintaining a 46.8% average ROCE over three years. With founder Thomas Dahlstedt owning 65% post-IPO, Nordrest is expanding into Finland and targeting 10% annual growth. Trading at 12x PE, 7.2x EV/EBITDA, and 0.73x P/S, Nordrest appears undervalued compared to larger competitors like Compass Group. While MRE demand volatility poses a risk, the company's diversified revenue streams, long shelf-life products, and new facility investment mitigate concerns, positioning Nordrest for continued growth and profitability.

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Usio, Inc. (USIO) is a diversified payments company with a $6 price target, trading at 1.4x 2025 revenue ($102M) and a 58% discount to peers. The company offers ACH, prepaid cards, card processing, and bill printing services, with a 24% 5-year revenue CAGR. Usio's innovative approach has led to successful acquisitions and major customer wins, including a recent $20M+ ARR PayFac deal. Key growth drivers include the PayFac business, synergies from the Output Solutions acquisition, and potential new large PayFac deals. Risks include regulatory changes, cybersecurity threats, errors, and fraud. Management expects 10-12% revenue growth and $4.0-$4.5M EBITDA for 2024. The company has a strong balance sheet with $7.1M in cash and is EBITDA positive. Catalysts include the ramp-up of the new large PayFac customer, potential acquisitions, and continued innovation in payment solutions.

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