Last week, you might have seen that Gogo Inc. (NASDAQ:GOGO) released its quarterly result to the market. The early response was not positive, with shares down 5.7% to US$12.65 in the past week. Gogo missed revenue estimates by 2.6%, with sales of US$99m, although statutory earnings per share (EPS) of US$0.15 beat expectations, coming in 4.3% ahead of analyst estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Gogo
Taking into account the latest results, the current consensus from Gogo's seven analysts is for revenues of US$440.4m in 2023, which would reflect an okay 7.4% increase on its sales over the past 12 months. Statutory earnings per share are expected to dive 21% to US$0.56 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$445.9m and earnings per share (EPS) of US$0.55 in 2023. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$19.70, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Gogo analyst has a price target of US$26.00 per share, while the most pessimistic values it at US$15.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Gogo is forecast to grow faster in the future than it has in the past, with revenues expected to display 10% annualised growth until the end of 2023. If achieved, this would be a much better result than the 18% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.7% per year. So it looks like Gogo is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$19.70, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Gogo going out to 2025, and you can see them free on our platform here..
Even so, be aware that Gogo is showing 4 warning signs in our investment analysis , and 1 of those is potentially serious...
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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.