Join        Login             Stock Quote

Trulia (TRLA) Downgraded To 'Hold' By Deutsche Bank On Valuation

 February 19, 2013 03:17 PM

(By Balaseshan) Deutsche Bank analyst Lloyd Walmsley downgraded rating of Trulia Inc. (NYSE: TRLA) to "Hold" from "Buy" on valuation, while increasing price target to $34 from $30.

Walmsley downgraded Trulia shares as the current stock price exceeds his upwardly revised price target. In his view, current valuation levels appear full.

The company has been executing well, and he continues to see meaningful upside to the analyst's estimates given the size of the real estate advertising end market at $24 billion and tailwinds from the real estate recovery. He would be more bullish on any pullback under $30/share.

[Related -Trulia Inc (TRLA) Q3 Earnings Preview: A Tough Sell]

The analyst continues to be bullish on Trulia's opportunity, as the company continues to grow audience rapidly and remains well positioned to benefit as real estate ad dollars follow users online and to mobile.

Real estate advertising in print has fallen from $11.2 billion to $4.5 billion from 2010 to 2012 (per Borrell), and there continues to be a large opportunity for Trulia to attract those dollars and further shifts from away from print to online/mobile, Walmsley noted.

The analyst sees his current estimates as conservative, with revenue growth decelerating from 77% year-over-year in 2012 to 50% in 2013 and 39% in 2014.

In a more bullish scenario, were revenue growth to come in at 56% in 2013 and 48% in 2014, and assuming similar EBITDA margins to Walmsley's current estimates, he could get to a valuation of $39 per share (about 10% upside from here).

[Related -Yelp Inc (YELP): Yelp! Options Buzzing As Shares Rocket Higher]

This analysis excludes any benefit from mortgage leads in 2014 (not currently in the analyst's model) which contributed almost $6 million in revenue to Zillow Inc. (NASDAQ: Z) in 2011.

TRLA is trading down 8.60% at $32.31 on Tuesday.

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageGroupon Inc. (GRPN): B. Riley Lowballing with $9 Target?

Groupon Inc. (NASDAQ:GRPN) might be struggling today (what isn’t?), but don’t expect the stock to stay down read on...

article imageWells Fargo & Company (NYSE:WFC) Q2 Earnings Preview: July’s Perfect Track Record

Wells Fargo & Company (NYSE:WFC) is scheduled to announce its second quarter 2014 earnings on Friday, July read on...

article imageAmerican Apparel Inc. (APP) and International Stem Cell Corp (ISCO): Trading Under $1 with Seven Figure I

Admittedly, it was difficult to pick one of the 30 that stood out compared to the other 29. So, instead of read on...

article imageCanadian Solar Inc. (CSIQ): Going to $40 Says FBR capital

On an otherwise red day, Canadian Solar Inc. (NASDAQ:CSIQ) is bobbing higher, up nearly 1% as we type. The read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.