Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Livongo Health Rocketed 49.8% Higher in May

By Cory Renauer – Jun 4, 2020 at 5:12AM

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

A stellar earnings report suggests this digital health start-up is heading in the right direction.

What happened

Shares of Livongo Health (LVGO), a digital health company, jumped 49.8% in May, according to data from S&P Global Market Intelligence. A glowing first-quarter earnings report provided investors all the encouragement they needed last month.

So what

In the first quarter of 2019, before its initial public offering, Livongo lost an adjusted $0.49 per share. The stock soared last month because instead of another expected loss, the company actually earned an adjusted $0.03 per share during the first three months of 2020.

Dollar bill folded into the shape of an arrow pointing up.

Image source: Getty Images.

Remote patient monitoring is quickly becoming standard care for treating chronic conditions, and Livongo is leading the charge. The number of enrolled Livongo for Diabetes members at the end of March rose 100% year over year.

Investors were also encouraged to see the company hasn't been cutting prices to gain all those new members. Revenue rose 115% compared to the previous-year period.

Now what

Livongo expects revenue to rise from $68 million in the first quarter to between $73 million and $75 million in the second quarter.

For 2020, Livongo raised its outlook to account for faster-than-expected adoption of its remote monitoring services, largely as a result of the COVID-19 outbreaks and social distancing efforts to contain them. Now the company expects revenue to grow between 70% and 78% in 2020 to a range between $290 million and $303 million.

There are around 147 million Americans living with a chronic condition, and two-fifths have more than one. The company's most popular service, Livongo for Diabetes, had around 328,000 members at the end of March, so there's still a lot of room to grow.

Cory Renauer has no position in any of the stocks mentioned. 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 09/25/2022.

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.