Despite technological progress and reduced execution risk demonstrated by Gogo’s successful 5G milestone, analysts revised their revenue growth forecasts downward, resulting in a consensus price target reduction from $14.56 to $13.75.
Analyst Commentary
- Successful completion of first end-to-end 5G call using GCT Semi chipset demonstrates technological progress.
- 5G development milestone significantly reduces perceived execution and technology risks.
- Positive outlook for return to growth in air-to-ground services starting in 2026.
- Bullish analysts view sustained revenue and earnings growth as likely following 5G validation.
- Expectation of valuation multiple expansion driven by improving growth visibility and risk mitigation.
What's in the News
- Gogo has completed a successful end-to-end 5G call with its new chipset, marking a major milestone toward commercial 5G air-to-ground (ATG) connectivity for business aviation in North America; over 300 aircraft are pre-provisioned for Gogo 5G, with installation expected to take about two weeks.
- The company received FAA PMA for its Galileo FDX antenna, which will enable high-speed broadband (up to 195Mbps) and is optimized for multi-device use via the Eutelsat OneWeb LEO satellite network; commercial deployment is targeted for late 2025.
- Gogo reaffirmed 2025 revenue guidance of $870 million to $910 million.
- The company did not repurchase shares during Q1 2025 but has completed 4.49 million shares repurchased for $38 million under its prior buyback program.
- Gogo was dropped as a constituent from several Russell value and small-cap indexes, including the Russell 2000, 2500, 3000 Value, 3000E Value, and Small Cap Comp Value benchmarks and indexes.
Valuation Changes
Summary of Valuation Changes for Gogo
- The Consensus Analyst Price Target has fallen from $14.56 to $13.75.
- The Consensus Revenue Growth forecasts for Gogo has significantly fallen from 41.9% per annum to 26.5% per annum.
- The Net Profit Margin for Gogo has significantly risen from 12.23% to 14.63%.
Disclaimer
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