Gogo Inc’s (NASDAQ:GOGO) Path To Profitability

Gogo Inc’s (NASDAQ:GOGO): Gogo Inc., through its subsidiaries, provides inflight broadband connectivity and wireless entertainment services to the aviation industry in the United States and internationally. With the latest financial year loss of -US$171.99m and a trailing-twelve month of -US$158.05m, the US$437.63m market-cap alleviates its loss by moving closer towards its target of breakeven. The most pressing concern for investors is GOGO’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for GOGO.

Check out our latest analysis for Gogo

GOGO is bordering on breakeven, according to Internet analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$82.45m in 2021. GOGO is therefore projected to breakeven around a couple of months from now! What rate will GOGO have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 53.36%, which is rather optimistic! If this rate turns out to be too aggressive, GOGO may become profitable much later than analysts predict.

NasdaqGS:GOGO Past Future Earnings June 14th 18
NasdaqGS:GOGO Past Future Earnings June 14th 18

Underlying developments driving GOGO’s growth isn’t the focus of this broad overview, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I would like to bring into light with GOGO is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of GOGO which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at GOGO, take a look at GOGO’s company page on Simply Wall St. I’ve also put together a list of pertinent aspects you should further examine:

  1. Valuation: What is GOGO worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether GOGO is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Gogo’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.