Please ensure Javascript is enabled for purposes of website accessibility

Why Gogo's Shares Surged 50% in September

By Anders Bylund - Updated Oct 8, 2019 at 4:49PM

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 expert posted some good-looking installation statistics, followed by some positive color commentary by a major client.

What happened

Shares of in-flight broadband service provider Gogo (GOGO -1.46%) jumped 50% higher in September, according to data from S&P Global Market Intelligence. The company drove this surge with a one-two punch of meaty press releases. At this point, Gogo's stock has gained 80% year to date.

So what

First, Gogo's shares rose 11% in a single day on the announcement of 1,500 completed system installations. That's still a very small slice of a global market with roughly 17,000 airliners aloft at any given time. But it's also a headline-ready round number that shows steady progress from less than 1,300 installations in January.

The next week, Gogo enjoyed another buzz thanks to public comments by an executive from Delta Air Lines (DAL -3.60%). Share prices surged another 10% on the revelation that Delta wants to set itself apart from the competition by offering free Wi-Fi on every flight.

A young man looking at his smartphone, seated in an airliner.

Image source: Getty Images.

Now what

Gogo is already a supplier to Delta, but it never hurts to see a major client preparing to use your products and services as a consumer-facing selling point. Investors should keep an eye on Gogo's backlog, which stood at 850 unfilled orders in early September. The combination of filled and unfilled orders has held relatively steady so far in 2019, and it would be good for the company's future revenue flows to see the backlog take another jump. The Delta deal should push Gogo in that direction as the airline's high-level ambitions turn into bankable order sheets and invoices.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Delta Air Lines. The Motley Fool has a disclosure policy.

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.
$16.89 (-1.46%) $0.25
Delta Air Lines, Inc. Stock Quote
Delta Air Lines, Inc.
$33.25 (-3.60%) $-1.24

*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
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

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.