Shares of Livongo Health (NASDAQ: 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.
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.
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.
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.
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