LVGO – Market expectations are for improvements in Uniform ROA, but management may be concerned about coronavirus, growth, and guidance

• Livongo Health, Inc. (LVGO:USA) currently trades above historical averages relative to UAFRS-based (Uniform) assets, with a 16.8x Uniform P/B. At these levels, the market has bullish expectations for the firm, but management may be concerned about coronavirus, member growth, and revenue guidance
  
  

• Specifically, management may lack confidence in their ability to sustain quarterly estimated value of agreement improvements, expand gross margins, and maintain their cash liquidity. In addition, they may have concerns that their diabetes and hypertension clients are among the populations most vulnerable to coronavirus, about the impact of coronavirus on the healthcare system, and about the length of the emergency waiver period for all inpatient facilities to use their diabetes meter. Furthermore, they may lack confidence in their ability to meet increased 2020 revenue guidance of $290mn-$303mn and sustain quarter-over-quarter member increases