Telenav, Inc.: Up 176% Year-to-Date and Just Blew Through a Resistance Level

Telenav, Inc. Up 176% in 2019, With Triple-Digit Upside Potential
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Telenav Inc Soars on Q4 Results

Telenav Inc (NASDAQ:TNAV) has ignored all of the white noise that has pummeled the stock market this year. The Internet content and information stock is up 176% year-to-date, unfazed by the May sell-off and early August swoon.

And the company’s outlook for the second half of 2019 looks equally as compelling; Telenav just reported strong fourth-quarter and year-end results, including a strong cash position and no debt.

TNAV Stock Overview

Telenav Inc is a leading provider of connected car and location-based services in the U.S. and around the world. The company’s navigation systems include GPS, real-time traffic data, early-warning systems, semi-autonomous driving functions, and location-based mobile advertising. (Source: “Investor Presentation August 2019,” Telenav Inc, last accessed August 15, 2019.)

The Santa Clara, California-based company is a top supplier of navigation software engines installed on North American-produced vehicles. Telenav has long-term relationships with Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM).

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Over the last few years, the number of connected cars using Telenav is growing at a compound annual growth rate of 61%. In the company’s recently completed fourth quarter, ended June 30, 1.4 million cars were equipped with Telenav-connected services.

TNAV Stock Information
Market Cap $523.5 Million
52-Week Change 87.3%
52-Week High $11.29
52-Week Low $3.35
Shares Outstanding 45.6 Million
Float 28.2 Million
50-Day Moving Average $9.01
200-Day Moving Average $7.05

(Source: “Telenav, Inc. (TNAV),” Yahoo! Finance, last accessed August 15, 2019.)

Telenav stock has climbed 176% since the start of 2019. Thanks to strong fourth-quarter results and new partnership with Grab, Southeast Asia’s leading ride-hailing platform, TNAV stock recently blew through a long-held resistance level near $10.00.

Chart courtesy of StockCharts.com

Another Strong Quarter

On August 8, Telenav announced that revenue for the fourth quarter of its fiscal 2019 (ended June 30) increased four percent year-over-year and 10% sequentially to $58.5 million. Gross profit was up nine percent year-over-year and 12% sequentially to $26.4 million. (Source: “Telenav Reports Fourth Quarter and Fiscal 2019 Financial Results,” Telenav Inc, August 8, 2019.)

Telenav reported a fourth-quarter net loss of $12.9 million ($0.28 per share), versus a net loss of $7.5 million ($0.17 per share) in the same period last year. The increase in net loss is mainly attributed to goodwill impairment charges and expenses associated with an increase in billings.

Adjusted cash flow from operations was $17.2 million, compared with a loss of $2.5 million in the same prior-year period and $4.2 million in the previous quarter. The large increase in adjusted cash flow came from higher unit volumes and one-time billing.

Telenav ended the quarter with cash and cash equivalents of $99.5 million, and the company remains debt-free.

Full-year revenue was up one percent-year-over-year, at $220.9 million. The company noted that its revenue for the first half of 2019 was hurt by lower per-unit prices from lower third-party content costs.

Telenav’s fiscal 2019 gross profit was up six percent, at $96.2 million. The company’s net loss improved significantly to $32.5 million ($0.71 per share), compared with a loss of $12.8 million ($0.92 per share) in fiscal 2018.

Adjusted cash flow from operations in fiscal 2019 was $21.2 million, compared to a loss of $12.8 million in fiscal 2018.

For the first quarter of fiscal 2020, ended September 30, 2019, Telenav expects its revenue to be in the range of $62.0 to $64.0 million. At the midpoint, this represents year-over-year revenue growth of approximately 11%.

The company also anticipates a net loss of between $4.5 and $5.5 million, compared to a 2019 first-quarter net loss of $7.9 million. Lastly, Telenav expects its adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) to break even at $1.0 million.

In the first quarter of 2019, the company reported adjusted EBITDA of $2.8 million.

Analyst Take

Telenav Inc continues to shrug off the headwinds facing the broader tech industry and stock market. Telenav stock has surged 176% year-to-date and its outlook is solid. The company continues to improve its financials.

TNAV stock might have made strong triple-digit gains already, but it is poised for significant growth over the coming quarters.