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Thursday, May 26, 2022

GOGO stock is soaring today: Why is it so?

Shares of Gogo Inc. were soaring in the intraday trading today following the announcement of increased long-term financial targets. GOGO stock price saw a surge of 23.85% to reach $15.14 a share at the time of this writing. The trading volume as of now was around 10 million, far higher than the average trading volume. Let’s deep dive to explore more of it.

What’s Happening?

GOGO stock today announced the increase in the long-term financial targets which it previously anticipated in the fourth quarter 2020 financial results. According to the raised targets,

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  • Revenue will grow at a compound annual growth rate of 15% from 2020 to 2025. The previous target was 10%.
  • Annual Adjusted EBITDA will rise from 40% in 2021 to 45% in 2025. The previously anticipated target was 35% to 40%.
  • GOGO stock anticipates $125 million in free cash flow in the year 2023 following the Gogo 5G network deployment in 2022. The company expects that it will have a free cash flow of $200 million in 2025. The previously anticipated target for the cash flow was more than $100 million in2023

Performance of GOGO stock in Q2,2021:

On August 5, 2021, GOGO stock announced second-quarter 2021 financial results according to which

  • Gogo generated $82.4 million in revenue representing a 51% increase as compared to the second quarter of 2020.
  • The company reported a record service revenue of $64.8 million,47% higher as compared to Q2 2020.
  • GOGO suffered a net loss of $66.4 million from continuing operations in the second quarter of 2021. This compares to a $14.2 million net loss in the same tenure of the previous year.
  • By the end of June 30, 2021, the company had $109.2 million in cash equivalents.

About GOGO stock:

Gogo Inc. is the provider of wireless entertainment services and inflight broadband connectivity to the aviation industry in the United States and across the globe. The company operates in three segments: Commercial Aviation North America (CA-NA), Business Aviation (BA), Commercial Aviation Rest of World (CA-ROW).  It was founded in 1991 and its headquarters are located in Chicago, Illinois.

Wrap Up:

Investors are responding positively to the announcement of raised financial targets by the GOGO stock. The raised long-term financial targets reflect the positive growth of the company. In a nutshell, this stock can be a good bet for investors in the long run.

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