Finding high-quality stocks to buy for good prices has definitely become more difficult now that many stocks have rebounded from lows in March, when the coronavirus market crash hit its bottom. Nevertheless, a careful search reveals some companies still worth considering. One particularly attractive investment today is Livongo Health (LVGO), a provider of a cloud-based platform to help improve the lives of individuals with chronic conditions.

The company's soaring top line and its massive addressable market make this growth stock a great bet for investors willing to hold shares over the long haul.

Here's a closer look at the stock.

A chart showing a stock price moving higher.

Image source: Getty Images.

Incredible growth

Livongo's business has grown at extraordinary rates recently. Fiscal 2019 revenue soared 149% year over year, driven primarily by a 96% year-over-year jump in members of Livongo for Diabetes, the company's main offering. Strong momentum continued into the first quarter of fiscal 2020, with revenue surging 115% year over year to $68.8 million. Livongo for Diabetes members were up 100% year over year, coming in at more than 328,000.

"The COVID-19 pandemic has accelerated the need for new virtual care delivery models like Livongo," said Livongo CEO Zane Burke in the company's May 6 fiscal first-quarter earnings release. 

The company's business model is highly leverage-able. Livongo aggregates data from its customers and sends automated and personalized "nudges" to its members, such as reminders, lifestyle suggestions, or health alerts. Messages are sent to members through whatever messaging medium is the most optimal at a given time, whether it's delivered via a member's blood glucose meter, a mobile app, a text message, or other forms of communication. Every additional partner or member benefits from technology Livongo has already built. This scalable business model is evident by the company's rapidly improving gross profit margin, which expanded 450 basis points year over year in the first quarter of fiscal 2020, to about 74%.

Livongo family of products

Livongo family of products. Image source: Livongo Health.

A big market opportunity

With just $207 million in trailing-12-month revenue, these are still early days for Livongo. Consider that more than 34 million people in the United States, or about 10% of the U.S. population, have been diagnosed with diabetes. Further, there are over 500,000 new people diagnosed with diabetes every year in the U.S. Yet the company has only 328,000 Livongo for Diabetes customers.

Of course, there's also a massive opportunity for the company to cross-sell other solutions to existing Livongo for Diabetes members. Management has said that its resellers that offer multiple Livongo solutions earn higher returns on their spend on Livongo offerings.

A premium price

Investors will have to pay a handsome premium to buy into this growth story. The stock currently has a market cap of $5.6 billion despite recording trailing-12-month revenue of just $207 million and negative free cash flow of $53 million.

But with revenue soaring, and considering the leverage built into Livongo's business model, investors may want to consider paying up for this fast-growing, high-quality company. Sure, the stock will likely see some significant volatility over the next five years. But investors willing to hold shares for five years or more could be nicely rewarded if Livongo captures meaningful share of the massive market for improved solutions for chronic conditions.