Telenav Inc: Tech Penny Stock Up 51% in 2019 & Just Completed a Golden Crossover

Telenav Inc: Bullish Tech Penny Stock
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Telenav Inc Up 51% in 2019, Just Getting Started

The fourth quarter of 2018 was not kind to Telenav Inc (NASDAQ:TNAV), or any stocks for that matter. The broader markets experienced a sell-off in October and then swooned in December. As a result, Telenav stock ended the year 25% in the red.

It has been a different story in 2019, though. Over the first two-and-a-half months, the Santa Clara-based tech penny stock is up 51%. And the company’s short- and long-term growth estimates point to strong gains for the rest of the year.

Trading around $6.35 at the time of this writing, a 2019 TNAV stock forecast of $12.00, which represents an increase of roughly 89%, is certainly within reach.

Telenav Overview

Telenav, as its name suggests, provides embedded navigation and mobile navigation services for automobiles around the globe. Telenav’s connected car platform helps automakers deliver smarter, safer, and more personalized user experiences. (Source: “Q3 FY’19 Investor Presentation,” Telenav Inc, last accessed March 18, 2019.)

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The company’s navigation services include points of interest, real-time traffic data, early-warning systems, semi-autonomous driving functions, and location-based mobile advertising.

Telenav’s software is currently embedded in more than 21 million vehicles. Over the last two-and-a-half years, the company has experienced tremendous momentum, with the number of connected cars powered by Telenav growing at a compound annual growth rate (CAGR) of 61%.

And that number is expected to grow at a blistering pace. Between 2018 and 2023, connected car services are projected to grow at a CAGR of 24%. By 2030, the connected car software and data market is forecast to grow to over $500.0 billion.

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

Telenav Stock Information
Market Cap $281.9 million
Beta 0.83
52-Week Change 5.9%
52-Week High $6.60
52-Week Low $3.35
Shares Outstanding 45.5 million
Float 26.9 million
50-Day Moving Average $5.40
200-Day Moving Average $4.72

(Source: “Telenav, Inc. (TNAV),” Yahoo! Finance, last accessed March 18, 2019.)

Telenav stock took a hit during the market-wide fourth-quarter meltdown. But it has experienced a tremendous rebound in 2019, helped in part by solid second-quarter financial results.

Up more than 50% year-to-date, TNAV stock has erased all of its fourth-quarter losses and has even broken through a resistance level near $6.00.

The next big test for Telenav shares will be the $6.50 level. There is reason to believe that the stock will top that mark; it just completed a golden crossover.

A golden crossover is a bullish indicator wherein the 50-day moving average crosses over the 200-day moving average, indicating additional bullish moves. Telenav’s encouraging outlook and investor optimism should help fuel that move.


Chart courtesy of StockCharts.com

Telenav Inc Announces Solid Outlook

On February 7, Telenav announced its financial results for the second quarter of fiscal 2019 (ended December 31, 2018).

Total second-quarter revenue was $57.2 million, down from $61.4 million in the same prior-year period. (Source: “Telenav Reports Second Quarter Fiscal 2019 Financial Results,” Telenav Inc, February 7, 2019.)

Billings for the second quarter of fiscal 2019 were $63.6 million. In the second quarter of fiscal 2018, billings were $70.1 million. The year-over-year decline in revenue and billings was due primarily to lower per-unit pricing in the company’s automotive business unit.

Without the impact on revenue and billings from the lower third-party content costs, both revenue and billings would have grown during the quarter. This is borne out by the growth of gross profit and adjusted cash flow from operations.

Gross profit in the second quarter of fiscal 2019 was $25.0 million, up from $23.5 million in Q2 2018. Adjusted cash flow from operations was $2.6 million, up from a loss of $1.8 million in the year-ago period.

Telenav Inc reported a second-quarter net loss of $4.6 million ($0.10 per share) versus a net loss of $8.4 million ($0.19 per share) in the same prior-year period.

At the end of the second quarter, Telenav had cash, cash equivalents, and short-term investments (excluding restricted cash) of $85.9 million, an increase of $4.6 million from the September 30, 2018 cash balance of $81.3 million.

Furthermore, Telenav remains debt-free.

“In the second quarter, we achieved a significant milestone of positive adjusted cash flow from operations, a non-[generally accepted accounting principles] measure, evidence that the company is improving its financial fundamentals while driving growth,” said Chairman and CEO HP Jin. (Source: Ibid.)

Telenav’s board of directors authorized a program for the repurchase of up to $20.0 million worth of shares of common stock through open-market purchases, over the next 18 months.

Recent Business Highlights

  • Telenav shipped more than 21 million auto units with its software and services.
  • General Motors Company (NYSE:GM) launched Telenav’s hybrid navigation solution on additional 2019-model vehicles, including the “Chevrolet Blazer,” “Chevrolet Malibu,” and “Cadillac CT6.”
  • Toyota Motor Corp (NYSE:TM) launched Telenav’s “Scout GPS Link” on additional 2019-model vehicles, including the “Toyota RAV4” and the “Lexus UX.”
  • Telenav announced a collaboration with Amazon.com, Inc. (NASDAQ:AMZN) to use the “Alexa” conversational voice interface for in-car navigation.

Q3 Fiscal 2019 Business Outlook

For the third quarter of fiscal 2019, ending March 31, 2019, Telenav Inc expects the following:

  • Total revenue to be between $49.0 and $53.0 million
  • Billings to be between $61.0 and $65.0 million
  • Net loss to be between $7.0 and $9.0 million.
  • Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss to be between $5.0 and $6.0 million

Analyst Take

There is a lot going on at Telenav Inc.

The mobile navigation company has successfully transformed into a connected car platform company. It increased its revenue and billing from General Motors and announced a partnership with Amazon.

An innovative company with great momentum, Telenav is well positioned to capitalize on the growing connected car software and data market in 2019 and beyond.