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Telenav (TNAV) to Report Q3 Earnings: What's in the Offing?

Zacks Equity Research

Telenav, Inc. TNAV is scheduled to report third-quarter fiscal 2019 financial results on May 9, after the closing bell. In the last-reported quarter, the company delivered a positive earnings surprise of 50%. Notably, the location-based platform services provider surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 23.7%.

Let’s find out how things are shaping up prior to the announcement —

What Our Model Says

Our proven model does not conclusively show that Telenav is likely to beat earnings this quarter as it does not possess one of the two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:

Earnings ESP: Telenav’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both are pegged at a loss of 13 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Telenav, Inc. Price and EPS Surprise

Telenav, Inc. Price and EPS Surprise
Telenav, Inc. Price and EPS Surprise

Telenav, Inc. price-eps-surprise | Telenav, Inc. Quote

Zacks Rank: Telenav currently has a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% Earnings ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Factors at Play

With the emergence of technologies like connected and autonomous vehicles, Telenav intends to help its OEM partners navigate the challenges and opportunities of a rapidly changing industry, auguring well for its long-term growth. During the fiscal third quarter, Telenav combined Amazon Alexa into its automotive navigation system offering. The solution has integrated the company’s automotive experience and navigation system with Amazon’s cloud-based voice service, expanding users’ touch points beyond home and smartphone to connected vehicles.

The company also significantly progressed toward its strategic goal of creating the world’s largest network of connected vehicles. It claimed that a cumulative 11.9-million Telenav-enabled vehicles offering connected services have been deployed in markets across the globe.  In addition, Telenav surpassed 21-million total vehicles shipped that feature its software and/or services. The company’s connected-car platform allows its partners to provide an excellent driving experience. Services, including Amazon Alexa embedded into the in-car navigation and Yelp integrated into its Scout GPS Link, are aimed at making lives less stressful and more productive. Such in-demand solution offerings are expected to have translated into the top-line growth during the March quarter.

For the fiscal third quarter, management expects total revenues between $49 million and $53 million. While automotive revenues are anticipated in the range of $42 million-$45 million, advertising revenues are likely to be about $5 million. It foresees gross margin to be around 45% and net loss is expected to be $7 million-$9 million.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Banco Macro S.A. BMA with an Earnings ESP of +0.49% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

YPF Sociedad Anónima YPF with an Earnings ESP of +26.49% and a Zacks Rank #2.

Acceleron Pharma Inc. XLRN with an Earnings ESP of +16.00% and a Zacks Rank #2.

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Macro Bank Inc. (BMA) : Free Stock Analysis Report
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Telenav, Inc. (TNAV) : Free Stock Analysis Report
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