Will Gogo’s (GOGO) $3 Million Sole-Source Government Contract Redefine Its In-Flight Connectivity Role?

• SD Government, a division of Gogo, was recently awarded a five-year, sole-source federal contract valued at US$3 million to supply multi-band, multi-orbit airborne satellite communications for a U.S. government agency, consolidating all the agency’s aero communications under a single agreement.
• This contract not only streamlines procurement for the agency, but also marks the first government deal leveraging Gogo’s integrated multi-orbit, multi-band connectivity capabilities, with flexibility to add new technologies and services over its duration.
• We’ll explore how this government contract win further anchors Gogo’s position in critical in-flight connectivity and impacts its future growth outlook.

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Gogo Investment Narrative Recap

To be a Gogo shareholder, you have to believe in the ongoing expansion of in-flight broadband connectivity and the company's ability to monetize new technologies across a still largely unconnected global fleet. The recent federal contract adds credibility to Gogo's position in government and defense markets, but its initial US$3 million value is not enough to move the needle on near-term revenue catalysts, nor does it offset core risks like competitive threats or execution on technology rollouts.

Of recent developments, the FAA approval for the Gogo Galileo FDX terminal earlier this month stands out as most relevant. This regulatory progress is closely linked to delivering new service capabilities and increasing revenue from business aviation clients, directly supporting the catalyst of growing addressable market opportunity highlighted by the SD Government contract award.

However, against this progress, investors should remain especially alert to the fact that delays in major product launches or regulatory approvals could...

Read the full narrative on Gogo (it's free!)

Gogo's outlook suggests $1.1 billion in revenue and $160.2 million in earnings by 2028. This assumes annual revenue growth of 17.0% and an increase in earnings of $152.9 million from the current $7.3 million.

Uncover how Gogo's forecasts yield a $15.50 fair value, a 64% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members submitted three fair value estimates for Gogo shares, ranging from US$10.69 to US$23.88. While these opinions reflect different growth assumptions, they highlight how risks such as regulatory hurdles for next-gen terminals are front of mind for many participants seeking to assess Gogo's growth potential.

Explore 3 other fair value estimates on Gogo - why the stock might be worth over 2x more than the current price!

Build Your Own Gogo Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Gogo research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Gogo research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Gogo's overall financial health at a glance.

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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.

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