Why Gogo, Inc. Shares Took Off

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of in-flight Wi-Fi provider Gogo, Inc.  were on the move today, climbing as much as 14%, as the stock continued to gain after Monday's strong earnings report.

So what: This looks like a lasting momentum run, as shares are up nearly 60% since last Thursday, and jumped 25% in one day alone on Monday's report. The recently public Gogo showed off 48% revenue growth in its third quarter, hitting $85.4 million in sales, much better than the $76.8 million analysts had expected. Meanwhile, its per-share loss came in at $0.22 versus the $0.31 consensus. Today's belated jump seems to have come from excitement around yesterday's approval of the AMR-US Airways merger, which lifted airline stocks as a whole. Gogo also got a strong endorsement from CNBC's Jim Cramer last night.

Now what: In its earnings report, the tech company also bumped up its outlook for the year, now lifting the high end of its revenue guidance to $325 million, instead of $315 million, and similarly increasing the high end of its adjusted EBITDA from zero, to $10 million. Wall Street may be underestimating this company, as in-flight Wi-Fi seems like a long-term growth category, and Gogo is continuing to innovate. The company also announced that it signed its first contract with a foreign-based carrier, Japan Airlines, and plans to introduce a new ground-to-orbit technology providing faster Internet speeds by next summer. Clearly, there are several new revenue streams ahead for Gogo. I'd expect shares to keep soaring past Wall Street estimates.

Got iPad?
The newest iPad Mini with Retina display might be hard to come by this quarter, given all the reports of supply constraints. Well, we're going to be sure to get a few -- and give them away! That's right: For the first time ever, The Motley Fool is hosting a contest where you can win a free iPad Mini with Retina display. All you have to do is tell us why you love The Motley Fool by clicking here! We'll pick the three most Foolish submissions to receive a free iPad Mini with Retina display.

See full terms and conditions by clicking here

The article Why Gogo, Inc. Shares Took Off originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story