Gogo (GOGO) versus B Communications (BCOM) Critical Analysis

Gogo (NASDAQ:GOGO) and B Communications (NASDAQ:BCOM) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Profitability

This table compares Gogo and B Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gogo -16.60% N/A -10.92%
B Communications -2.94% -0.84% -0.12%

Volatility and Risk

Gogo has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, B Communications has a beta of 1.52, meaning that its share price is 52% more volatile than the S&P 500.

Valuation & Earnings

This table compares Gogo and B Communications’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gogo $699.09 million 0.46 -$171.99 million ($2.17) -1.69
B Communications $2.82 billion 0.08 $22.00 million N/A N/A

B Communications has higher revenue and earnings than Gogo.

Institutional and Insider Ownership

67.3% of Gogo shares are held by institutional investors. Comparatively, 5.5% of B Communications shares are held by institutional investors. 36.2% of Gogo shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Gogo and B Communications, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gogo 1 5 1 0 2.00
B Communications 0 0 0 0 N/A

Gogo presently has a consensus price target of $8.50, indicating a potential upside of 131.61%. Given Gogo’s higher possible upside, research analysts clearly believe Gogo is more favorable than B Communications.

Summary

Gogo beats B Communications on 6 of the 11 factors compared between the two stocks.

Gogo Company Profile

Gogo Inc., through its subsidiaries, provides inflight broadband connectivity and wireless entertainment services to the aviation industry in the United States and internationally. It operates through three segments: Commercial Aviation North America (CA-NA), Commercial Aviation Rest of World (CA-ROW), and Business Aviation (BA). The CA-NA segment offers inflight connectivity and wireless digital entertainment solutions to commercial airline passengers flying routes that generally begin and end within North America. The CA-ROW segment provides inflight connectivity and wireless digital entertainment solutions to passengers flying on foreign-based commercial airlines and flights outside of North America for North American based commercial airlines. The BA segment offers equipment for inflight connectivity, including voice and data services to the business aviation market. Its services include AVANCE, an inflight broadband service that utilizes air-to-ground (ATG) network and ATG spectrum; Passenger Entertainment, an inflight entertainment service; and satellite-based voice and data services through strategic alliances with satellite companies. This segment serves aircraft manufacturers, owners, and operators, as well as government and military entities. The company was founded in 1991 and is headquartered in Chicago, Illinois.

B Communications Company Profile

B Communications Ltd., through its subsidiaries, provides a range of telecommunications services for business and private customers in Israel. The company offers fixed-line telephony, fixed-line broadband Internet infrastructure access, Internet service provider, cellular telephony, international telephony, international and domestic data transfer and network, information and communication technology, pay television, multi-channel television, television and radio broadcasts, satellite broadcasts, and customer call center services, as well as other communications infrastructures and services. It is also involved in the maintenance and development of communications infrastructures; provision of communications services to other communications providers; and supply and maintenance of equipment on customer premises, such as network end point services. The company was formerly known as 012 Smile. Communications Ltd. and changed its name to B Communications Ltd. in March 2010. B Communications Ltd. was founded in 1999 and is based in Ramat Gan, Israel. B Communications Ltd. is a subsidiary of Internet Gold – Golden Lines Ltd.

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