Its time to buy Gogo promotion-William Blair
2022.12.28 14:05
Its time to buy Gogo promotion-William Blair
Budrigannews.com – On Gogo (NASDAQ:), William Blair maintained an Outperform rating. in a note on Wednesday, but stated that monthly business jet flights in the industry have decreased for the fifth month in a row.
According to analysts at William Blair, this could put a halt to the delivery ramp in 2025.
“Business jet flights in November were down 9% from last year, but they were still up 18% from 2019.” Business jet flight numbers for November were released by the FAA. Five months in a row have seen a negative monthly comp. In contrast to the flattish growth seen prior to the pandemic, we anticipate that business jet industry traffic will return to a low single digit range in the world post-pandemic.
Growth in traffic is just one indicator of industry demand. Gogo shares traded up 7.3% on December 23 compared to a 0.22 percent increase in the Nasdaq 100 shortly after the data were released, as the analysts explained.
They now expect to deliver 720, 810, and 840 business jets to the global industry in 2022, 2023, and 2024, respectively, with bookings beginning to decline in 2023.
“We estimate that 700 new Gogo aircraft will have their in-flight Wi-Fi AVANCE system activated in 2023, compared to 577 aircraft activations in 2022.” The analysts added, “Gogo shipped 25% more units of its system in the September quarter than in the June quarter, when it reached its previous record high.”
We gauge that generally 40% of Gogo’s new planes will come from line fits and 60% will come from retrofitting existing airplane. High-speed connectivity has, according to our estimates, penetrated roughly 55% of the North American market.
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“Recent dip in Gogo shares on recession fears is a buying opportunity,” according to William Blair. In the past month, Gogo shares have lost 9%, but they have gained 6% in 2022.
The analysts assert, “We believe the market for inflight connectivity and the broader business aviation market will prove to be highly resilient to a recession.”
