S*********g
发帖数: 24893 | 1 Why Gogo Is An Excellent Investment
by Kyle Fishman
Disclosure: I am long Gogo. (More...)
Summary
Gogo is the industry leader of inflight WiFi.
Gogo has two powerful characteristics that make it a solid investment: A
Competitive Advantage and Culture of Innovation.
The industry has been growing very fast, and is expected to grow much
faster in years to come.
In-flight Wifi is the future of air travel. Over the next decade, it is
expected to expand fifteen-fold, from a $350 million business to a $5
billion business.
Dominant Market Position:
Gogo (GOGO) has a very dominant position in the market; it has a near-
monopoly, with long-term contracts with nine major airlines in North America
. The business concept makes a lot of sense as it provides a desirable
service to a very captive audience. Gogo has a wide-moat with heavy barriers
to entry. It is expensive for airlines to re-wire their planes if they want
to change to a different provider, not to mention they are locked in their
contracts for multiple years.
Consistent Revenue Growth:
Gogo's Revenue has steadily increased: $36.8 million in 2009, $94.7 million
in 2010, $160.2 million in 2011, $233.5 million in 2012, and $311.4 million
(est) in 2013. Guidance projects revenue in 2014 will be in the range of $
400-422 million.
Room for more growth:
Gogo currently has approximately 2,000 planes connected to their service,
with a market of 20,000 in the U.S. alone, not to mention international
expansion.
Faster Speed:
Gogo is undergoing a transition from its air-to-ground network to a
satellite connectivity system which will make its internet speed six times
faster.
Innovation and Diversification:
Gogo is not just about Wifi, it is also launching texting and calling
programs as well as on-demand entertainment systems.
Cheaper than its competition:
ViaSat (VSAT) is near its all-time high, trading around $70/share, and it's
not even profitable. Gogo is well below its all-time high, trading around $
20/share.
Potential Risks:
Being a tech company, there's always uncertainty over what inventions and
products will catch on and what fads will go out of style. However, Gogo
appears to be a very adaptable company that is prepared to capitalize on
future consumer trends and interests. Their plan to launch in-flight texting
shows that they are keen on current trends.
There may also be cause for concern that Gogo's long-term debt exceeds
current assets. Gogo's long-term debt is $235.6 million, while the net
current assets are $212 million.
Another potential risk is the pressure on Gogo to deliver surprises when
they report earnings. In their Q4 2013 earnings report, they beat the
expectations, delivered strong results, offered upbeat guidance, but their
stock still fell. While this doesn't necessarily mean the stock will fall on
positive news in the future, it certainly shows investors expect more out
of Gogo, in a sense, they are 'expected to beat the expectations.'
Lawsuit could pose a risk:
Gogo is currently facing a class-action anti-trust lawsuit alleging they
have engaged in illegal 'monopolistic' practices that discourage healthy
competition by locking in airlines into long-term contracts. A trial date is
set for September. While this could pose a risk, I believe the plaintiffs
are likely to lose; they do not have a legal leg to stand on. When the
ruling is announced, it will send Gogo's stock soaring higher.
Many businesses lock their customers in multi-year contracts, and Gogo does
not have a technical "monopoly" by any definition. The plaintiffs claim that
Gogo controls 85% of the relevant market share, but Gogo says they are
defining "relevant" too narrowly, and the court expressed some skepticism
toward the plaintiff's 85% figure. You can also tell that the plaintiffs
behind this lawsuit are amateurs who cannot get their facts in line: They
incorrectly claimed that Gogo has a contract with Southwest Airlines, when
that was not the case. They also incorrectly claimed that Gogo had a long-
term contract with United Airlines, when in fact it was only a short-term
contract.
In a motion to dismiss, Gogo wrote, "Plaintiffs admit that during the period
that Gogo allegedly foreclosed competition, several Gogo competitors
entered the market and gained market share. These new entrants not only
gained market share by executing agreements with airlines with which Gogo
does not currently do business (e.g., Southwest Airlines and JetBlue Airways
) but also took business that the [complaint] alleges was locked up by Gogo'
s exclusive dealing contracts."
The judge refused to dismiss the lawsuit, but that shouldn't be interpreted
as giving any merit or credibility to the plaintiffs' claims; that will be
determined during the September trial. This legal dispute gives the company
a catalyst that will drive the stock higher when the uncertainty is resolved.
Conclusion: Gogo has a lot of strengths that will make it an excellent
investment, and is likely to maintain its wide-moat competitive advantage
for years to come. While the lawsuit they are facing may pose a risk, it is
certainly a risk worth taking. There is a lot of pressure on Gogo to deliver
earnings surprises, but they certainly have the resources in place to do
that. | r***r
发帖数: 2077 | 2 坑王好严肃。
这股3年、5年、10年长期持有，也许是个好投资，短期太妖了 | S*********g
发帖数: 24893 | 3 总结：GOGO的收入还有翻10-20倍的潜力。需要担心的是lawsuit和债务。 | S*********g
发帖数: 24893 | 4 我打算捏5年了
【在 r***r 的大作中提到】
: 坑王好严肃。
: 这股3年、5年、10年长期持有，也许是个好投资，短期太妖了
| m********t
发帖数: 13072 | 5 股民会奔溃的。。。这里的都是最大忍耐限度为5天
【在 S*********g 的大作中提到】
: 我打算捏5年了
| S*********g
发帖数: 24893 | 6 连小小人都叛变革命了
【在 m********t 的大作中提到】
: 股民会奔溃的。。。这里的都是最大忍耐限度为5天
| m********t
发帖数: 13072 | 7 这种热门股，我们蛙卵是看不懂的，还请大金格格多加指教。
【在 S*********g 的大作中提到】
: 连小小人都叛变革命了
| w******l
发帖数: 1400 | 8 让等到九月后的soaring，如果夏天崩盘，岂不是死的很惨？！
A
【在 S*********g 的大作中提到】
: Why Gogo Is An Excellent Investment
: by Kyle Fishman
: Disclosure: I am long Gogo. (More...)
: Summary
: Gogo is the industry leader of inflight WiFi.
: Gogo has two powerful characteristics that make it a solid investment: A
: Competitive Advantage and Culture of Innovation.
: The industry has been growing very fast, and is expected to grow much
: faster in years to come.
: In-flight Wifi is the future of air travel. Over the next decade, it is
| l*****l
发帖数: 4170 | | S*********g
发帖数: 24893 | |
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