Please ensure Javascript is enabled for purposes of website accessibility

Why Gogo Stock Jumped on Monday

By Daniel Sparks – Updated Aug 10, 2020 at 11:51AM

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 aviation internet-connectivity company's revenue decline wasn't as bad as expected.

What happened

Shares of aviation connectivity and wireless-entertainment specialist Gogo (GOGO -2.01%) jumped on Monday, rising as much as 17.7%. As of 11:21 a.m. EDT today, however, the stock had settled to a 3.2% gain.

The stock's gain was likely primarily fueled by Gogo's second-quarter earnings release, which included revenue that was significantly higher than analysts' consensus forecast for the metric.

A chart showing a stock price moving higher

Image source: Getty Images.

So what

The coronavirus weighed heavily on Gogo's second-quarter results as demand for both domestic and international travel suffered during the period. The company's total revenue fell 55% year over year to $96.6 million, though this hit wasn't as bad as expected. On average, analysts were modeling for $90.3 million of second-quarter revenue.

Profitability unsurprisingly suffered during the period. Gogo's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were negative $15.9 million, down from positive $38 million in the year-ago period.

Now what

Due to continued uncertainty surrounding COVID-19's impact on air travel, management refrained from providing guidance. But CEO Oakleigh Thorne said the company was "encouraged by the strong recovery in business aviation as well as the beginnings of a recovery in global commercial aviation which has continued into August."

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.
GOGO
$11.69 (-2.01%) $0.24

*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
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

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.