This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Why Gogo is Worth $20

NEW YORK (TheStreet) -- Gogo (GOGO - Get Report) which provides in-flight Internet connectivity, could be worth $20 a share, according to one analyst, as the company continues to build out its services among different airlines.

Evercore analyst Jonathan Schildkraut raised his price target to $20 from $15, keeping an "overweight" rating, noting that recent progress on several fronts, including Gogo's recent win for Japan Airlines' 77 aircraft, Gogo's ground-to-orbit (GTO) announcement, which is capable of delivering more than 60Mbps to the aircraft, and the recently launched Text & Talk service for Boeing (BA) continue to demonstrate Gogo as a technology leader.

"Coming out of its IPO, many investors feared that satellite technology had leap-frogged GOGO's ATG capabilities - leaving the company at longer-term competitive disadvantage in NA and ROW," Schildkraut wrote in his note. "We believe GTO represents a leap-frogging of standard satellite service capabilities - providing an on-going leadership position in NA, while demonstrating its technology strength to the ROW market."

Schildkraut notes winning the Japan Airline contract highlights a big opportunity for Gogo, which has rest-of-the world (ROW) wins for approximately 250 aircraft so far. "The 77 aircraft Japan Airlines (JAL) win is important for two reasons: (1) it demonstrates that GOGO can win ROW fleets from non-U.S. carriers, and (2) it points to a still uptapped market opportunity in ROW."

Although most associate Gogo with in-flight connectivity (IFC), the company does have other services to help facilitate growth. The recent Text & Talk launch, and the in-flight entertainment (IFE) initiatives "highlight this potential."

Gogo is slated to report earnings on Nov. 11. Schildkraut is expecting the company to report a loss of 26 cents a share on revenue of $78.1 million, with the company burning $36.9 million in cash during the quarter. Analysts surveyed by Thomson Reuters expect the company to lose 31 cents per share on $76.8 million in revenue.

Shares of Gogo were falling 1.8% to $17.72 in mid Thursday trading.

--Written by Chris Ciaccia in New York

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
GOGO $21.65 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs