Gogo Inc. (GOGO) Vs. SunPower Corporation (SPWR): Updated Outlook

Gogo Inc. (NASDAQ: GOGO) shares are -19.69% down in the year-to-date (YTD) period and have moved 2.80% or $0.14 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +286.47% lower. Comparatively, the stock is -20.68% down YTD and 129.46% over the trailing 3-month period. If we look at the shorter duration, its week performance is 38.54% and 76.63% over the month.

Analyst Recommendations

On May 10, 2019, William Blair recommended the GOGO stock is a Outperform, while earlier, ROTH Capital had Initiated the stock as a Buy on May 13, 2019. 6 analysts offering the recommendations for the stock have a consensus rating of 2.30 to suggest that the GOGO stock is a “Moderate Buy. 0 of the 6 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 3 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $5.14 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $5.67. The forecasts give the Gogo Inc. stock a price target range of $8.00 on the higher side while at least one analyst think the stock could plunge to a low of $4.00. The two limits represent an upside potential of 35.75% or -28.5%.

Earnings Forecast

Analysts estimate the earnings to decrease -19.30% in the current quarter to -$0.77, down from the -$0.28 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$3.56, down -35.20% from -$1.81 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.99 and -$0.44. Wall Street estimates earnings per share to be at an average of -$1.89 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 40 over the last 12 months, while SEC filings reveal that there have been 39 insider sales over the same period. Insiders have purchases 509,432 shares while those sold by company executives and officers stand at 77,951. The last 3 months have seen insiders trade a total of 328,263 and 31,220 in purchases and sales respectively.

Bayer Michael P., a SVP, Controller & CAO at the company, sold 10,947 shares worth $70655.0 at $6.45 per share on Nov 12. The Director had earlier bought another 22,610 GOGO shares valued at $36099.0 on May 13. The shares were bought at $1.60 per share.

SunPower Corporation (NASDAQ:SPWR), on the other hand, is trading around $11.19 with a market cap of $1.84B and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $8.29 and spell out a less modest performance – a -34.98% return. Some analysts are even forecasting -$0.6 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the SunPower Corporation (SPWR) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

SPWR’s operating margin was negative on the trailing 12 months basis, remaining steady at -6.90%, while the operating expenses over the recent quarter were at $59.56 million. This represented a 83.12% of the company’s total revenues which amounted $352.91 million. With this in place, we can see that the company’s diluted EPS inclined $0.11 on the year-over-year period, growing to $0.75 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $1.94 billion from $2.0 billion over the previous quarter. Short term investments amounted to $6.32 million while total current assets were at $1.11 billion. The cash flow from operating activities totaled -$158.84 million, significantly higher than the -$230.09 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$172.29 million.

Insider activity

Insiders have transacted a total of 62 times at SunPower Corporation over the last 6 months, with insider purchases undertaken 44 times and accounting for 5,204,343 shares. Insider sales totaled 433,926 shares over the same period, with these deals completed in 18 transactions. Looking at these numbers, we realize that net purchases over that period are 26.0 shares. Insiders now hold a total of 89.62M shares after the latest sales, with 7.80% net shares purchased.

Major holders

Insiders own 0.80% of the company shares, while shares held by institutions stand at 42.70% with a share float percentage of 80.57M. Investors are also buoyed by the number of investors in a company, with SunPower Corporation having a total of 269 institutions that hold shares in the company. The top two institutional holders are Wellington Management Company, LLP with over 13.14 million shares worth more than $100.66 million. As of Jun 29, 2020, Wellington Management Company, LLP held 7.73% of shares outstanding.

The other major institutional holder is Vanguard Group, Inc. (The), with the investment firm holding over 11.49 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $87.99 million and represent 6.75% of shares outstanding.