TechDigits

Tech news
Wednesday, Oct 28, 2020

Livongo stock pops on news of its biggest contract ever

Livongo stock pops on news of its biggest contract ever

Shares of Livongo Health Inc. rose more than 10 percent at the start of trading Monday morning after it announced a bigger-than-expected federal contract.
The Mountain View company said it will begin offering its diabetes management service to 5.3 million federal employees next year through a contract with the Federal Employees Health Benefits Program (FEHBP).

Livongo said the contract is expected to add about 25,000 Livongo for Diabetes members in 2020, growing to about 45,000 members in 2021. That's bigger than the 20,000 to 30,000 additional members the company had previously projected.

This is forecast to bring in between $20 million and $25 million in new revenue in 2020 and between $30 million and $35 million in 2021.

The company in early September said it expected its total revenue for the current fiscal year will be between $159 million and $162 million, up from $68.4 million in fiscal 2018.

Despite that, growing losses reported at the same time had Livongo's stock trading more than a third below its July IPO offering price before Monday's news.

Dr. Jennifer Schneider, Livongo's president, said the federal contract highlights the company's competitive advantages.

"Government entities and large plans want to see multi-year, clinically validated results at scale, and only Livongo has that independently validated data," she said. Contracts like this also add to the information that the company uses to provide its services, "making us smarter and more member focused every day," she added.

Livongo shares opened at $19.24 on Monday. It went public at $28 a share in July and peaked at $45.68 shortly after that.
Newsletter

Related Articles

TechDigits
×