Gogo (NASDAQ:GOGO) shareholder returns have been solid, earning 156% in 5 years

When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, you can make far more than 100% on a really good stock. For example, the Gogo Inc. (NASDAQ:GOGO) share price has soared 156% in the last half decade. Most would be very happy with that. And in the last week the share price has popped 4.5%. But this might be partly because the broader market had a good week last week, gaining 2.1%.

Since it's been a strong week for Gogo shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for Gogo

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last half decade, Gogo became profitable. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We know that Gogo has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Gogo's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Investors in Gogo had a tough year, with a total loss of 42%, against a market gain of about 20%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 21% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Gogo has 5 warning signs (and 3 which are a bit concerning) we think you should know about.

We will like Gogo better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.