Telenav Inc: Overlooked Tech Stock Up 292% in 2019, Has Strong Outlook

Telenav Inc Could Double Again in 2019

Telenav Inc (NASDAQ:TNAV) is an Internet content and information company that has been on fire in the first half of 2019. Telenav stock is up 292% year-to-date and the company has provided investors with strong fourth-quarter guidance.

While the broader markets were selling off in May, investor optimism helped TNAV stock advance 16.5%. By comparison, the S&P 500 slid 6.7% in May while the tech-heavy Nasdaq dropped 8.3%.

Telenav shares have made strong gains in 2019, but it’s not over yet. Thanks to the company’s strong outlook, new customer wins, and investor optimism, Telenav stock could double over the next few quarters.

Telenav Inc Overview

The Santa Clara, California-based Telenav provides connected car and location-based services in the U.S. and internationally.

Telenav might be a penny stock, but the company’s ultimate goal is to become “the global leader in transforming people’s life on the go.” It’s well on its way to achieving that. (Source: “Telenav, Inc. (NASDAQ: TNAV) Investor Presentation May 2019 ,” Telenav Inc, last accessed June 20, 2019.)

According to Telenav, it was actually the first company to introduce Global Positioning System (GPS) navigation to mobile phones.

Today, almost 23 million vehicles are equipped with the company’s navigation systems (GPS, real-time traffic data, early-warning systems, semi-autonomous driving functions, and location-based mobile advertising). Of that total, 13.3 million are connected cars. (Source: “Telenav Reports Third Quarter Fiscal 2019 Financial Results,” Telenav Inc, May 9, 2019.)

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

In early June, Telenav launched “VIVID,” its embedded, cloud-connected, in-vehicle, infotainment system. It blends vehicle controls (radio, climate control) with entertainment, navigation, and voice control through “Amazon Alexa.” (Source: “Telenav Launches Vivid, a Hybrid, Cloud Connected and Personalized In-Vehicle Infotainment System,” Telenav Inc, June 5, 2019.)

In late May, Telenav announced that it will be powering the mapping function for Daimler AG’s (OTCMKTS:DMLRY, FRA:DAI)  “COMAND Touch,” a free, downloadable app for “Mercedes-Benz” vehicles that controls the “COMAND Rear Seat Entertainment System.” (Source: “Telenav Powers Mapping in New Premium Rear-Seat Entertainment System,” Telenav Inc, May 28, 2019.)

The optional equipment will be launched for Mercedes-Benz “E-Class” and “S-Class” cars. COMAND Touch will be available in every region except China, which has decided to go with its own map provider.

(Source: “Telenav, Inc. (TNAV),” Yahoo! Finance, last accessed June 20, 2019.)

TeleNav stock has had great momentum in 2019, climbing 292%. Most impressively, the company’s share price trended steadily higher in May, climbing 16.5%.

Last month ended up being the worst May on Wall Street since 2010, as President Donald Trump’s trade war with China ramped up and Trump threatened Mexico with tariffs. As the broader market tumbled, TNAV stock notched up another record close.

Telenav shares continue to have excellent momentum, and the second half of 2019 looks like it could be as equally bullish.

Chart courtesy of StockCharts.com

Q3 Revenue Up 14%, Billings Up 18%, Gross Profit of $23.4 Million

On May 9, Telenav announced that total revenue for the third quarter ended March 31 advanced 14% year-over-year to $53.1 million. Third-quarter billings increased by 18% to $69.1 million. (Source: Telenav Inc, May 9, 2019, op. cit.)

Gross profit grew eight percent to $23.4 million. The company reported a net loss of $7.5 million, a significant improvement over the third quarter 2018 net loss of $14.5 million.

The company ended the third quarter with cash, cash equivalents, and short-term investments (excluding restricted cash of $86.5 million). Telenav continues to be debt-free.

In the third quarter, Telenav repurchased 221,333 shares of its own common stock, at an average cost of $5.89 per share.

In the fourth quarter, the company expects to report total revenue between $51.0 and $54.0 million. At the mid-point, that represents a year-over-year increase of 216%. Billings are expected to be $64.0 to $67.0 million; the midpoint of that would be a 10.6% increase over the same prior-year period.

Telenav’s net loss for the fourth quarter is expected to be $7.5 to $8.5 million, a huge improvement from the fourth-quarter 2018 net loss of $26.6 million.

Analyst Take

TeleNav Inc is doing everything you wouldn’t expect from a penny stock. It has a strong balance sheet and no long-term debt, and it has been reporting strong revenue growth, reducing its net loss, and actively buying back shares.

Despite its relatively small size compared to companies like Alphabet Inc (NASDAQ:GOOG), Garmin Ltd. (NASDAQ:GRMN), and Baidu Inc (NASDAQ:BIDU), TeleNav is well positioned to compete in the global connected-car market.