Why Gogo’s Shares Surged 50% in September

The in-flight connectivity expert posted some good-looking installation statistics, followed by some positive color commentary by a major client.

| More on:
Arrowings ascending on a chalkboard

Image source: Getty Images.

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

What happened

Shares of in-flight broadband service provider Gogo (NASDAQ: GOGO) jumped 50% higher in September, according to data from S&P Global Market Intelligence. The company drove this surge with a one-two punch of meaty press releases. At this point, Gogo’s stock has gained 80% year to date.

So what

First, Gogo’s shares rose 11% in a single day on the announcement of 1,500 completed system installations. That’s still a very small slice of a global market with roughly 17,000 airliners aloft at any given time. But it’s also a headline-ready round number that shows steady progress from less than 1,300 installations in January.

The next week, Gogo enjoyed another buzz thanks to public comments by an executive from Delta Air Lines (NYSE: DAL). Share prices surged another 10% on the revelation that Delta wants to set itself apart from the competition by offering free Wi-Fi on every flight.

Now what

Gogo is already a supplier to Delta, but it never hurts to see a major client preparing to use your products and services as a consumer-facing selling point. Investors should keep an eye on Gogo’s backlog, which stood at 850 unfilled orders in early September. The combination of filled and unfilled orders has held relatively steady so far in 2019, and it would be good for the company’s future revenue flows to see the backlog take another jump. The Delta deal should push Gogo in that direction as the airline’s high-level ambitions turn into bankable order sheets and invoices.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Delta Air Lines. The Motley Fool has a disclosure policy.

More on Tech Stocks

Dial moving from 4G to 5G
Tech Stocks

TFSA Investors: 2 Canadian Stocks With Unbelievable Staying Power 

Amid economic uncertainty, investors look for stocks that can thrive in any crisis and grow long term. Here are two…

Read more »

Make a choice, path to success, sign
Tech Stocks

Nuvei Stock Crashed 23% After Q2 Earnings: Why I’d Buy More Today

Nuvei (TSX:NVEI) stock could stage a sharp recovery soon, as it looks way too oversold after Tuesday’s big crash.

Read more »

A worker uses a double monitor computer screen in an office.
Tech Stocks

Got $2,000? Buy These 2 Tech Stocks and Hold Until Retirement

Tech stocks are on sale, but that might not be the case for much longer. Here are two top picks…

Read more »

Business man on stock market financial trade indicator background.
Energy Stocks

Market Volatility: 2 Value Stocks to Buy Right Now

The market volatility does not look like it will let up any time soon, but these two stocks are too…

Read more »

movies, theatre, popcorn
Tech Stocks

Cineplex Stock Shoots Up as Meme Stocks Rally

Cineplex (TSX:CGX) stock seems to have started a rebound after meme stocks started climbing on Monday. But should investors buy…

Read more »

Target. Stand out from the crowd
Tech Stocks

This Is, Hands Down, the Top Canadian High-Growth Stock to Buy This Week

I expect this attractive Canadian high-growth stock to rally in the near term, as it’s set to announce its latest…

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Tech Stocks

Why Sierra Wireless (TSX:SW) Stock Has Surged 79% in 2022

Sierra Wireless Inc. (TSX:SW)(NASDAQ:SWIR) is a tech stock that has soared on the back of a big acquisition announcement last…

Read more »

Financial technology concept.
Tech Stocks

BlackBerry Stock is Rallying! Buy Before It’s Too Late

BlackBerry’s improving fundamentals have helped its stock soar lately and outperform the broader market.

Read more »