Contrasting Tele2 (OTCMKTS:TLTZY) and Gogo (NASDAQ:GOGO)

Tele2 (OTCMKTS:TLTZY) and Gogo (NASDAQ:GOGO) are both communication services companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Profitability

This table compares Tele2 and Gogo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tele2	33.96%	43.42%	15.54%
Gogo	-0.09%	22.55%	1.97%

Institutional and Insider Ownership

69.6% of Gogo shares are owned by institutional investors. 25.6% of Gogo shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Tele2 has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, Gogo has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Tele2 and Gogo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tele2	0	3	2	1	2.67
Gogo	2	2	1	0	1.80

Gogo has a consensus target price of $8.50, suggesting a potential upside of 202.49%. Given Gogo’s higher possible upside, analysts plainly believe Gogo is more favorable than Tele2.

Earnings & Valuation

This table compares Tele2 and Gogo”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tele2	$3.06 billion	4.01	$468.79 million	$0.78	11.43
Gogo	$910.49 million	0.42	$12.92 million	$0.01	281.00

Tele2 has higher revenue and earnings than Gogo. Tele2 is trading at a lower price-to-earnings ratio than Gogo, indicating that it is currently the more affordable of the two stocks.

Summary

Tele2 beats Gogo on 10 of the 15 factors compared between the two stocks.

About Tele2

Tele2 AB (publ) provides fixed and mobile connectivity, handset related data services, and entertainment services in Sweden, Lithuania, Latvia, and Estonia. The company offers mobile telephony and data, fixed broadband, fixed telephony, switch and contact center, cloud services, IT services, network services, workplace, video and collaboration, united communications, and security services. The company also provides data network services, including dark fiber, dedicated wavelength, ethernet and IP VPN, and internet services; and unified communications comprising service provider, mobile virtual network operator, and carrier SIP-interconnect services. In addition, it offers single and dual IMSI solutions for consumer and IoT applications; on-demand roaming services, such as subscription management, data plan management, real time charging, eSIM delivery, SIM management, and set up services; routing and termination solutions for international voice traffic; application-2-person messaging services; and value-added services comprising shortcodes and long numbers for businesses to have 2-way communication with their customers. The company was incorporated in 1990 and is headquartered in Kista, Sweden.

About Gogo

Gogo Inc., together with its subsidiaries, provides broadband connectivity services to the aviation industry in the United States and internationally. The company's product platform includes networks, antennas, and airborne equipment and software. It offers in-flight systems; in-flight services; aviation partner support; and engineering, design, and development services, as well as production operations functions. The company offers voice and data, in-flight entertainment, and other services. In addition, it engages in the development, deployment, and operation of networks, towers, and data center infrastructure to support in-flight connectivity services, as well as in the provision of telecommunications connections to the internet. The company sells its products primarily to aircraft operators and original equipment manufacturers of business aviation aircraft through a distribution network of independent dealers. Gogo Inc. was founded in 1991 and is headquartered in Broomfield, Colorado. As of May 2024, Gogo Inc. claims that “Gogo is the only company in North America with a complete, certified airborne 5G network, meaning that all components within the network (including onboard equipment) are 5G native.”