Please ensure Javascript is enabled for purposes of website accessibility

Why Livongo Health Stock Is Sliding Today

By Keith Speights – Jul 16, 2020 at 12:08PM

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

Bad news about U.S. unemployment appears to be weighing on the high-flying stock.

What happened

Shares of Livongo Health (LVGO) were sliding 6.5% lower as of 11:10 a.m. EDT on Thursday. The digital health-management company didn't announce any news that would cause its stock to fall. Instead, Livongo's shares were dragged lower as the overall stock market slipped on disappointing unemployment numbers released today.

So what

Growth stocks like Livongo Health tend to rise and fall more dramatically than the overall stock market on any positive or negative news. But does the unemployment news that affected the broader market really impact Livongo? Possibly.

Man looking at blood sugar levels on his smartphone

Image source: Getty Images.

Livongo markets its platform for managing chronic conditions including diabetes and hypertension to large self-insured employers, health plans, and government programs. Clients pay for each participant on a monthly basis. If large organizations that are existing customers cut back on staffing, it can reduce Livongo's revenue. If prospects lay off employees, it lowers the company's growth prospects. 

However, Livongo probably doesn't have much to worry about. The COVID-19 pandemic has fueled strong demand for its digital health-management platform. The momentum from the first half of 2020 seems likely to continue throughout the rest of the year and well into the future.

Now what

The main thing for investors to watch is Livongo Health's second-quarter update scheduled for Aug. 6, 2020. If unemployment levels are negatively impacting the company's prospects, it could show up in Livongo's Q2 numbers.  

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 10/04/2022.

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.