Investment Thesis
Gogo exhibits severe financial distress despite reporting positive net income: negative free cash flow of -33M and minimal interest coverage of 1.9x on 6.89x debt-to-equity leverage creates material default risk. Declining net income (-6% YoY) coupled with extraordinary revenue growth (7487% YoY) suggests margin compression, accounting changes, or unsustainable business model rather than genuine operational improvement.
Strengths
- Operating income of 31.7M demonstrates core business profitability at 14% margin
- Current ratio of 1.66x provides adequate short-term liquidity
- Cash position of 103.5M offers near-term buffer
Risks
- Negative free cash flow of -33M indicates company is burning cash despite accounting profits—unsustainable position
- Debt-to-equity of 6.89x with interest coverage of only 1.9x creates acute refinancing and default risk
- Net income declined 6% YoY despite 7487% revenue growth, signaling severe margin compression or revenue quality issues
- Negative operating cash flow of -7.2M reveals cash generation problem at operational core
- ROA of 1% indicates extremely poor capital efficiency and asset utilization
Key Metrics to Watch
- Free cash flow trajectory and return to positive operating cash generation
- Interest coverage ratio—must improve above 2.5x for sustainability
- Debt-to-equity reduction and debt service capacity
- Sustainability and margin profile of the anomalous 7487% revenue growth
Financial Metrics
Revenue
226.3M
Net Income
13.1M
EPS (Diluted)
$0.10
Free Cash Flow
-33.0M
Total Assets
1.3B
Cash
103.5M
Profitability Ratios
Gross Margin
N/A
Operating Margin
14.0%
Net Margin
5.8%
ROE
11.1%
ROA
1.0%
FCF Margin
-14.6%
Balance Sheet & Liquidity
Current Ratio
1.66x
Quick Ratio
1.27x
Debt/Equity
6.89x
Debt/Assets
90.8%
Interest Coverage
1.88x
Long-term Debt
813.0M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-09T10:52:23.894851 |
Data as of: 2026-03-31 |
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