Please ensure Javascript is enabled for purposes of website accessibility

Why Gogo Inc. Stock Popped 15.8% in February

By Steve Symington - Mar 8, 2017 at 8:03PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The in-flight connectivity company jumped after a solid Q4 report. Here's what investors need to know now.

What happened

Shares of Gogo Inc. (GOGO -1.00%) rose 15.8% in the month of February, according to data provided by S&P Global Market Intelligence, after the in-flight connectivity and entertainment specialist delivered strong fourth-quarter 2016 results.

So what

Gogo's revenue last quarter rose 16% year over year, to $160 million, which translated to a net loss of $26.9 million, or $0.34 per share. That may not sound encouraging, but that was a narrower loss than the $33.9 million, or $0.43 per share, in last year's fourth quarter. And Wall Street was modeling a wider net loss of $0.46 per share on lower revenue of $152.1 million.

Gogo logo.

IMAGE SOURCE: GOGO.

What's more, Gogo told investors to expect 2017 revenue to increase 12% to 17%, or to a range of $670 million to $695 million, compared to consensus estimates for revenue of $664 million. Gogo also forecasted a "significant decline in cash needs" in 2018, driven by a decline in average investment required for each installation of its cutting-edge 2Ku technology.

Now what

Earlier today, Gogo followed up by announcing it has installed its 3,000th commercial aircraft with in-flight connectivity, as well as over 4,200 business aircraft. Even so, just 130 of those 3,000 commercial aircraft have installed Gogo's 2Ku, which leverages Gogo's cutting-edge global satellite network. As it stands, 12 airlines representing over 1,500 aircraft have signed up to use Gogo's 2Ku service, and nearly all of those installations should be complete by the end of next year.

In the end, this was an encouraging reprieve for investors who endured Gogo's harrowing 47.6% decline last year, which came primarily as the company lost a coveted in-flight Wi-Fi deal to a competitor. But for investors willing to buy now and watch Gogo's profitability improve as it fulfills the bulk of its impending 2Ku installations, the stock could potentially be poised for a much better 2017.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Gogo Inc. Stock Quote
Gogo Inc.
GOGO
$15.40 (-1.00%) $0.15

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
323%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.