Please ensure Javascript is enabled for purposes of website accessibility

Why Livongo Health Stock Is Soaring Today

By Keith Speights - May 7, 2020 at 11:01AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The healthcare company delivered impressive first-quarter results and expects even higher growth.

What happened

Shares of Livongo Health (LVGO) were up 11.8% as of noon EDT on Thursday. The big jump came after the company announced its first-quarter results following the market close on Wednesday.

Livongo's quarterly revenue rose 115% year over year to $68.8 million, well above analysts' average estimate of $65.8 million. The company also reported adjusted earnings of $3.9 million, or $0.03 per share. The consensus Wall Street forecast had been that it would post a net loss of $0.04 per share.

So what

Beating Wall Street expectations is usually a sure-fire catalyst for a share price boost, and it was this time for Livongo Health. But there are even more reasons to be upbeat about this healthcare stock.

The COVID-19 pandemic appears to be creating a significant opportunity for Livongo. CEO Zane Burke said that the pandemic "has accelerated the need for new virtual care delivery models" like those that his company provides. Livongo's technology platform enables individuals to more effectively manage chronic conditions such as diabetes and hypertension, and includes remote monitoring and real-time personal coaching. With many people now hesitant to visit doctors' offices, Livongo's approach is more attractive than ever.

The company's numbers support Burke's optimistic view. Its diabetes membership more than doubled year over year in the first quarter to over 328,000. Its client base in Q1 jumped 44% from the previous quarter to 1,252. Burke also announced that Livongo is partnering with the Government Employees Health Association to provide its platform for diabetes and hypertension to federal employees, retirees, and their dependents.

Now what

Livongo Health's financial fortunes should keep on getting better. The company expects second-quarter revenue of between $73 million and $75 million. It also raised its full-year revenue guidance to a range of $290 million to $303 million; previously it had forecast revenue of $280 million to $290 million.

Keith Speights owns shares of Livongo Health Inc. The Motley Fool owns shares of and recommends Livongo Health Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Livongo Health, Inc. Stock Quote
Livongo Health, Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.