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ITRN - Ituran Location


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They made a relative big acquisition in Brazil (RT) that made the ARPU go lower.

 

Plus GM made changes to the terms of the OEM they had with them (3 monthes paid in advance for every costumer instead of 6). They also.made some changes in the way they work with the insurance companies (can't remember the details from the top of my head)

 

The Brazilian Real weakness also made revenue growth to slow down.

 

Management forcast 2021 to be a much better year with regard to subscription costumers growth.

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They are dependent on new car sales in emerging countries (Brazil, Israel etc) and those are down substantially. Currency is another factor - The Brazilian real is down more than 20% compared to the USD.

Long Term, I would be worried about obsolescence risk, since I would bet that in a few years from now, all new cars will have internet connectivity build it, which might make ITRN product redundant.

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