William Blair analyst Louie DiPalma upgraded Gogo (GOGO) to Outperform from Market Perform following Delta Air Lines' (DAL) announcement that it will begin trialing free Wi-Fi on select Gogo-equipped aircraft.

The decision by Delta to publicly announce this "ambitious" project is a large vote of confidence not only for Gogo's technology but also for its newfound financial stability, DiPalma tells investors in a research note.

He points out that Delta is Gogo's largest customer, representing 30% of its revenue. The analyst thinks Delta's free Wi-Fi rollout will be the catalyst that causes investor sentiment on Gogo "to hit an inflection point."

DiPalma projects that Gogo shares by 2021 will appreciate to a range of $10 to $15, which corresponds to a free cash flow yield of 4% to 6%.

The stock in premarket trading is up 14c to $5.30.