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Gogo (GOGO)
NASDAQ:GOGO
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Gogo
(NASDAQ:GOGO)72Outperform
Gogo (GOGO) vs. S&P 500 (SPY)
Market Cap
$874.17M
Dividend YieldN/A
Average Volume (3M)1.06M
Price to Earnings (P/E)16.3
Beta (1Y)1.18
Revenue Growth-0.79%
EPS Growth-64.40%
CountryUS
Employees457
SectorCommunication Services
Sector Strength85
IndustryTelecommunications
Share Statistics
EPS (TTM)0.43
Shares Outstanding125,779,236
10 Day Avg. Volume1,214,416
30 Day Avg. Volume1,063,898
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.16
Price to Cash Flow (P/CF)8.70
P/FCF Ratio7.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Gogo Business Overview & Revenue Model
Company DescriptionGogo Inc. is a leading provider of in-flight broadband connectivity and wireless entertainment solutions for the aviation industry. The company primarily serves commercial airlines, business aviation, and government aircraft, offering a suite of products and services that enhance passenger experience and provide reliable internet access while in transit.
How the Company Makes MoneyGogo makes money by offering its connectivity services to commercial airlines and business aviation clients. The company generates revenue through service agreements with airlines, where it charges fees based on usage, subscription models, or a combination of both. Gogo also earns money by selling and installing in-flight connectivity equipment on aircraft. Additionally, the company has partnerships with satellite and telecommunications providers to ensure seamless connectivity, which can influence service quality and pricing structures. Revenue is further supplemented by offering additional services such as passenger entertainment and value-added applications tailored for aviation needs.
Gogo Financial Statement Overview
Summary
Gogo exhibits strong profitability and cash flow generation with a solid gross profit margin and impressive free cash flow growth. However, high leverage on the balance sheet, indicated by a high debt-to-equity ratio, poses potential risks to financial stability.Income Statement
The income statement shows strong profitability metrics with a solid gross profit margin of 66.99% and a net profit margin of 13.94% for TTM (Trailing-Twelve-Months). Although revenue growth is slightly negative at -0.94% compared to the previous year, margins remain robust, indicating efficient cost management. However, a decline in EBIT margin from 31.23% to 24.78% suggests potential challenges in maintaining operational efficiency.77
Positive
Balance Sheet
The balance sheet reflects a high debt-to-equity ratio of 12.71, which is concerning as it indicates significant leverage. The equity ratio is low at 6.50%, highlighting a potential risk in financial stability. However, the return on equity is excellent at 107.01%, suggesting that the company is generating significant returns on limited equity, albeit with high leverage.54
Neutral
Cash Flow
Cash flow metrics are strong, with impressive free cash flow growth of 55.66% and a high operating cash flow to net income ratio of 1.88, indicating strong cash generation relative to earnings. The free cash flow to net income ratio of 1.51 also shows good cash flow support for net earnings, reflecting robust liquidity and financial flexibility.81
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 404.72M | 397.58M | 404.07M | 335.72M | 269.72M | 835.73M | Gross Profit |
| 271.07M | 264.63M | 268.17M | 233.52M | 185.35M | 403.15M | EBIT |
| 100.30M | 124.17M | 142.33M | 120.63M | 76.35M | 36.72M | EBITDA |
| 124.50M | 140.87M | 157.17M | 52.31M | 90.52M | 113.22M | Net Income Common Stockholders |
| 56.43M | 145.68M | 92.06M | 152.74M | -48.56M | -146.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 188.69M | 139.04M | 175.35M | 145.91M | 435.35M | 170.02M | Total Assets |
| 1.30B | 781.54M | 759.53M | 647.69M | 673.59M | 1.21B | Total Debt |
| 1.14B | 678.09M | 776.66M | 881.71M | 1.21B | 1.18B | Net Debt |
| 953.12M | 539.05M | 626.11M | 735.80M | 771.64M | 1.01B | Total Liabilities |
| 1.58B | 740.81M | 861.39M | 967.84M | 1.31B | 1.61B | Stockholders Equity |
| -283.97M | 40.73M | -101.87M | -320.15M | -641.11M | -398.89M |
| Cash Flow | Free Cash Flow | ||||
| 85.41M | 54.88M | 53.49M | 56.83M | -141.68M | -51.42M | Operating Cash Flow |
| 105.89M | 78.97M | 103.41M | 65.49M | -132.69M | 64.06M | Investing Cash Flow |
| 30.04M | 29.86M | -70.42M | -24.09M | 348.40M | -73.71M | Financing Cash Flow |
| -45.45M | -120.43M | -28.39M | -331.04M | 44.42M | -3.54M |
Gogo Technical Analysis
Negative
7.05
Price Trends
7.88
Negative
7.71
Negative
8.16
Negative
Market Momentum
-0.26
Positive
36.39
Neutral
16.00
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GOGO, the sentiment is Negative. The current price of 7.05 is below the 20-day moving average (MA) of 7.79, below the 50-day MA of 7.88, and below the 200-day MA of 8.16, indicating a bearish trend. The MACD of -0.26 indicates Positive momentum. The RSI at 36.39 is Neutral, neither overbought nor oversold. The STOCH value of 16.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GOGO.
Gogo Risk Analysis
Gogo disclosed 45 risk factors in its most recent earnings report. Gogo reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Gogo Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $874.17M | 16.28 | 130.82% | ― | -0.79% | -64.40% | |
72 Outperform | $3.27B | 31.91 | 15.40% | 1.83% | 5.05% | 632.38% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
51 Neutral | $8.89B | ― | -0.60% | ― | -6.99% | 91.98% | |
49 Neutral | $1.10B | ― | -8.28% | ― | 19.02% | 76.67% | |
48 Neutral | $92.36B | ― | -18.31% | 2.34% | -2.08% | -1212.72% | |
46 Neutral | $2.73B | ― | -17.12% | ― | 11.86% | -140.69% |
* Communication Services Sector Average
Performance Comparison
GOGO
Gogo
7.05
-1.85
-20.79%
SATS
Echostar
30.79
17.23
127.06%
GSAT
Globalstar
23.09
4.04
21.21%
INTC
Intel
20.81
-23.24
-52.76%
IRDM
Iridium Communications
30.59
2.74
9.84%
VSAT
ViaSat
9.63
-8.92
-48.09%
Gogo Earnings Call Summary
Earnings Call Date: Nov 5, 2024 | % Change Since: 7.63% | Next Earnings Date: Mar 14, 2025
Earnings Call Sentiment Neutral
The call highlighted significant progress in strategic initiatives, including the development and market anticipation of new products like Gogo Galileo and 5G. While there is excitement about future growth and a strong positive market response, current financial metrics show modest revenue growth and increased operational costs. The balance between these factors creates a mixed outlook.Highlights
Overall Demand and Data Usage Growth
Business aviation flights demand up 2% year-over-year and 30% from pre-COVID Q3 2019. Q3 data usage per hour increased 17% year-over-year and 106% from pre-COVID Q3 2019.
Strategic Product Development
Launch of Gogo Galileo Low-Earth-Orbit satellite and Gogo 5G product expected to reaccelerate growth. Both products are receiving positive customer responses.
AVANCE Units Growth
Total AVANCE units online grew 16% year-over-year to 4,379 aircraft, representing 62% of Gogo's ATG installed base.
Adjusted EBITDA Increase
Q3 EBITDA increased 14% sequentially due to lower legal fees.
Acquisition of Satcom Direct
Planned acquisition of Satcom Direct expected to augment growth, leveraging their strong sales and service organization.
Positive Customer and Market Response
Strong demand for the Gogo Galileo HDX product, with over 1,000 customers signing up for HDX webcast and 27 STC agreements signed.
Lowlights
Modest Revenue Growth
Revenue increased by only 3% year-over-year, driven by ARPA growth and an increase in AVANCE units online.
Challenges with Equipment Revenue
Quarterly equipment revenue was $18.7 million, a 7% sequential decrease. Many customers delayed purchases in anticipation of new product launches.
Operating Expenses Increase
Combined operating expenses increased 47% year-over-year, driven by acquisition-related costs and higher legal expenses.
ATG Aircraft Decline
ATG aircraft online decreased 2% year-over-year due to product life cycle dynamics.
Company Guidance
In the Gogo Inc. Q3 2024 earnings call, the company provided an updated financial outlook and guidance. The total revenue for the quarter was $100.5 million, representing a 3% year-over-year increase. The company reported service revenue of $81.9 million, while equipment revenue stood at $18.7 million, with 214 AVANCE shipments. Total ATG Average Revenue Per User (ARPU) reached a record $3,497, up 4% from the previous year. Gogo anticipates its 2024 revenue to range between $400 million and $410 million, with adjusted EBITDA forecasted at $120 million to $130 million. The company expects free cash flow for 2024 to be between $55 million and $65 million. The acquisition of Satcom Direct is projected to close by the end of 2024, with anticipated revenue for the combined company in 2024 to be approximately $890 million and adjusted EBITDA margins around 24%. Over the long term, Gogo expects annual revenue growth in the 10% range for the combined company.Gogo Corporate Events
Executive/Board Changes
Gogo Announces Leadership Changes and New CEO Appointment
Neutral
Dec 3, 2024
Amid new transactions, the Company has announced a series of key leadership changes, appointing Christopher Moore as CEO and Oakleigh Thorne as Executive Chair. New roles for Mike Begler, Zachary Cotner, and Hayden Olson were also revealed, each bringing extensive experience from previous positions. The company outlined employment agreements that include base salaries, bonuses, and stock units, ensuring incentives for the new leadership team, while severance agreements and retention bonuses aim to secure stability during this transition.
Executive/Board ChangesM&A TransactionsBusiness Operations and Strategy
Gogo Inc. Executive Transition and Acquisition Strategy
Neutral
Nov 21, 2024
Sergio Aguirre will retire from his role at Gogo Inc. by the end of 2024, transitioning to a consulting position to aid in the integration of Satcom Direct Holdings’ acquisition. This move ensures continuity and expertise during the merger process, with Aguirre continuing to earn his current salary until mid-2025 followed by a severance package, highlighting strategic planning in executive transitions.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.