Why Gogo is Worth $20

NEW YORK (TheStreet) -- Gogo (GOGO) 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.

More from Technology

Throwback Thursday: Intel Edition

Throwback Thursday: Intel Edition

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Intel CEO's Surprise Exit Leaves 'Large Void' That Won't Be Easy to Fill

Intel CEO's Surprise Exit Leaves 'Large Void' That Won't Be Easy to Fill

The Winners and Losers in Thursday's Market

The Winners and Losers in Thursday's Market

Will Porsche's Electric Car Push Take Down Tesla?

Will Porsche's Electric Car Push Take Down Tesla?