Telenav Inc: Stock Up 96% Year-to-Date and Should Double Again

Telenav Inc Already Up 96% in 2019, This $7.80 Stock Could Double
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Telenav Inc: Look for This $7.80 Stock to Double Again

Telenav Inc (NASDAQ:TNAV) is an excellent penny stock that we have been keeping a close eye on. The tech stock’s share price is up 96% year-to-date and, since TNAV stock completed a golden crossover in March, it has advanced an additional 30%.

Thanks to strong third-quarter financial results and an even stronger outlook, there is every reason to believe that the Telenav stock price could double in the second half of 2019.

Telenav Inc Overview

Telenav provides connected car and location-based services in the U.S. and around the world. The company’s location platform enables its clients to deliver custom connected car and mobile experiences. (Source: “Telenav, Inc. (NASDAQ: TNAV) Investor Presentation May 2019,” Telenav Inc, last accessed May 22, 2019.)

Telenav’s software, which is embedded in more than 21 million vehicles, includes navigation services, real-time traffic data, early-warning systems, semi-autonomous driving functions, and location-based mobile advertising.

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Through Telenav’s targeted advertising platform, advertisers can reach millions of users.

During the company’s third quarter, over 1.3 million Telenav-equipped vehicles capable of connected services were deployed into the global market. That brought the cumulative total to 13.3 million. (Source: “Telenav Reports Third Quarter Fiscal 2019 Financial Results,” Telenav Inc, May 9, 2019.)

Also in the quarter, more than 22.7 million total auto units with Telenav software and services were shipped.

Telenav’s clients include wireless carriers, automobile manufacturers, original equipment manufacturers, advertisers, and end users.

Telenav has long-term contracts with Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM). Toyota Motor Corp (NYSE:TM) recently launched Telenav’s “Scout GPS Link” in in its 2020 “Corolla” sedan.

Telenav also recently announced a partnership with Amazon.com, Inc. (NASDAQ:AMZN), which will see the “Alexa” voice assistant technology integrated into Telenav’s navigation systems.

The growth in the connected car market is expected to soar over the next few years, from 117 million in 2018 to 343 million in 2023, reflecting a compound annual growth rate (CAGR) of 24%. Telenav is well positioned to compete in that market. (Source: “Telenav, Inc. (NASDAQ: TNAV) Investor Presentation May 2019,” Telenav Inc, op cit.)

Telenav Inc Stock

TNAV Stock Information
Market Cap $358.6 million
Beta 0.92
52-Week Change 40.8%
52-Week High $7.92
52-Week Low $3.35
Shares Outstanding 45.6 Million
Float 26.3 Million
50-Day Moving Average $6.52
200-Day Moving Average $5.25

(Source: “Telenav, Inc. (TNAV),” Yahoo! Finance, last accessed May 22, 2019.)

Telenav’s share price, like the broader market, took a big hit in the fourth quarter of 2018. Things turned around in 2019 when the broader market took advantage of the January effect.

Thanks to great second- and third-quarter results, that momentum has carried on. Telenav stock is currently up 96% since the start of the year and has advanced 30% since completing a golden crossover in mid-March.

TNAV stock has erased all of its losses from 2018 and its share price recently broke through a tested resistance level at both $6.50 and $7.00.


Chart courtesy of StockCharts.com

The next resistance level, not tested since 2017, is at $8.50 and $9.00 per share. Telenav’s encouraging outlook and investor optimism should help its stock break through those levels.

Telenav Inc Reports Strong Third-Quarter Results

On May 9, Telenav reported its financial results for the third quarter ended March 31, 2019.

Total revenue for the third quarter rose by 14% year-over-year to $53.1 million. Billings were up by 18%, at $69.1 million. (Source: “Telenav Reports Third Quarter Fiscal 2019 Financial Results,” Telenav Inc, op cit.)

Gross profit increased by eight percent to $23.4 million, with automotive gross profit up by 12%, at $19.4 million.

Telenav reported a third-quarter net loss of $7.5 million, a 48% improvement from the $14.5 million net loss in the same prior-year period. Nevertheless, Telenav remains debt-free.

Telenav ended the third quarter with cash, cash equivalents, and short-term investments (excluding restricted cash) of $86.5 million. That was an increase of $600,000 since December 31.

Adjusted cash flow from operations, previously called adjusted earnings before interest, tax, depreciation, and amortization (EBITDA), was $4.2 million, an $8.3 million year-over-year improvement.

Also during the quarter, the company repurchased 221,333 shares of its common stock at an average cost of $5.89 per share.

In the fourth quarter, Telenav expects:

  • Total revenue to be $51.0–$54.0 million
  • Billings to be $64.0–$67.0 million
  • Net loss to be $7.5–$8.5 million.
  • Adjusted EBITDA loss to be $5.0–$6.0 million.
  • Adjusted cash flow from operations to break even at $1.0 million.

Analyst Take

What’s not to love about Telenav Inc? It has a solid balance sheet, no long-term debt, and is actively buying back its shares. The company has been reporting strong quarter-over-quarter revenue growth, reducing its net loss, and achieving positive adjusted cash flow from operations.

Telenav stock continues to have excellent momentum and should, barring any unforeseen circumstances, continue to trend steadily higher throughout 2019 and into 2020.