Shares of volatile in-flight broadband services specialist Gogo (NASDAQ:GOGO) outpaced the market last month by rising 16% compared to a 0.4% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.
The rally only offset a small portion of Gogo's recent losses, and shares remain down by more than 50% so far in 2018.
Investors grew more optimistic about the business last month, with much of its gain coming after a Wall Street analyst raised his short-term earnings targets. Gogo's management has projected adjusted earnings of between $35 million and $45 million this year, but a Morgan Stanley analyst believes stabilizing business trends could power higher actual results.
Gogo's business isn't yet on stable ground. Executives are aiming to slash costs in 2018 to help the company offset losses from the challenged rollout of its next-generation broadband system. Gogo has significant debt that it must service, too, which explains why management's focus right now is on bolstering cash flow. The stock might begin looking attractive, given the slump it has endured recently, but only if the business starts showing signs of healthier sales in the context of falling costs.