Livongo Health (LVGO) to Post Q3 Earnings: What's in Store?

Zacks Equity Research
·4 min read

Livongo Health, Inc. LVGO is slated to release third-quarter 2020 results on Oct 28, after the opening bell.

Further, it beat estimates in each of the trailing four quarters, the average surprise being 343.2%.

Q3 Estimates

For the third quarter, the Zacks Consensus Estimate for revenues is pegged at $95.6 million, suggesting growth of 104.8% from the prior-year quarter. The consensus mark for earnings per share is pegged at 4 cents. Notably, the company reported a loss per share of 5 cents in the year-ago quarter.

Factors to Note

Livongo Health third-quarter results are likely to reflect growth in core Livongo for Diabetes solution. Substantial contributions from hypertension, weight management and behavorial health offerings might have acted as catalysts in the quarter to be reported.

Further, continued strong demand in the company’s pipeline, rise in member enrollment and new client signings may have contributed to the third-quarter performance.

Additionally, higher incremental margins from members who continue to stay on the company’s platform are likely to have favorably impacted its performaance in the quarter to be reported.

Livongo Health, Inc. Price and EPS Surprise

Livongo Health, Inc. Price and EPS Surprise
Livongo Health, Inc. Price and EPS Surprise

Livongo Health, Inc. price-eps-surprise | Livongo Health, Inc. Quote

Livongo Health has been witnessing higher adoption of both of its core diabetes offering and other offerings. Further, apart from expediting the adoption of Livongo for Diabetes in the self-insured market, the company has been successfully expanding into fully-insured and government markets. This might get reflected in the third-quarter results.

During the first quarter, Livongo Health collaborated with Prognos Health to accelerate clinical laboratory data, which will allow members enrolled with the company to share their test results from leading laboratories with Livongo Health on an opt-in basis.

During the same period, the company also partnered with leading continuous glucose monitoring (CGM) makers — DexCom — wherein Livongo Health will be able to stream data from Dexcom G6 to its data engine.

Further, at the request of numerous health systems, the FDA has approved an emergency period waiver that will allow any inpatient facility in the United States to utilize Livongo Health’s cellular-enabled diabetes meter. This will enable people infected with COVID-19 to use the company’s remote blood glucose meter within a hospital setting.

Also, in August, Livongo and Teladoc inked a definitive merger agreement that will lead to the development of a leader in consumer-centered virtual care. This will further enable Livongo to enhance growth of its data-driven member platform and experience.

All the aforementioned developments are likely to have positively impacted the company’s third-quarter performance.

Further, expansion of strategic agreements with key channel partners like CVS Health and Express Scripts have been driving sales across multiple conditions.

However, the Livongo Health may have experienced a rise in operating expenses, which in turn might have weighed on its performance in the to-be-reported quarter.

Stocks Worth a Look

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.

Zimmer Biomet Holdings, Inc. ZBH has an Earnings ESP of +4.81% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

GW Pharmaceuticals plc GWPH has an Earnings ESP of +9.65% and a Zacks Rank of 3.

Pacific Biosciences of California, Inc. PACB has an Earnings ESP of +15.39% and a Zacks Rank of 3.

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