Is Gogo a No-Go?

Gogo shares fell by -4.3% Friday, and are now trading at a price of $16.66. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.

Gogo Inc., through its subsidiaries, provides broadband connectivity services to the aviation industry in the United States and internationally. The company belongs to the Communication Services sector, which has an average price to earnings (P/E) ratio of 18.65. In contrast, Gogo has a trailing 12 month P/E ratio of 6.9 based on its earnings per share of $2.4.

The company's finances are bleak. Gogo's revenues are shrinking, its indebted, and teetering on the edge of profitability, so conservative investors will likely overlook this stock.

2019-12-31 2020-12-31 2021-12-31
Revenue (k) $835,726 $269,718 $335,716
Revenue Growth n/a -67.73% 24.47%
Gross Margins 48.2% 68.7% 69.6%
Gross Margins Growth n/a 42.53% 1.31%
Operating Margins 4.4% 28.3% 35.9%
Operating Margins Growth n/a 543.18% 26.86%
Earnings Per Share -$1.81 -$3.04 $1.28
EPS Growth n/a -67.96% 142.11%
Diluted Shares (MM) 81 82 127
Free Cash Flow (k) -$51,417 -$141,677 $56,826
FCF Growth n/a -175.55% 140.11%
Capital Expenditures (k) -$115,478 -$8,990 -$8,660
Net Debt / EBITDA 5.97 8.69 5.06
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.