TRLA Market Research & Analysis Report
Updated Apr 7, 2014

Growth and Balance Sheet

The company reported a net loss of $11.1 million, or 30 cents diluted loss per share, for the fourth quarter of 2013 ending December 31. That's down from a net loss of $1.6 million, or 6 cents diluted loss per share for the same quarter last year. Full year 2013 loss per share amounted to 54 cents compared to 87 cents for 2012. Revenues for the fourth quarter were $49.7 million, up from $20.6 million for the same quarter last year. Monthly unique visitors in the fourth quarter was up 49% in comparison to the same quarter last year, and amounted to 35.3 million. Mobile monthly unique visitors in the fourth quarter of 2013 was up by 86% in comparison to the same quarter last year, and totaled to 14.3 million. Total subscribers as of 31 December 2013 were around 59,700, an increase of around 3,300 in comparison to September 30 2013. Operating profit margin for the quarter was -21.2% compared to -6.37% for the same quarter last year. The deterioration of the operating margin in comparison to the same quarter last year, despite the phenomenal increase in revenue, is due to more than doubling of every cost category expense. Net cash used in operating activities amounted to $1.4 million for the year 2013, in comparison to net cash provided by operating activities of $4.2 million for 2012. Trulia is expecting revenues to be in the range of $53.1 million to $53.5 million for the first quarter of 2014. TRLA forecasted first quarter loss per share of 2013 are expected to be from 27 cents to 75 cents, compared to actual loss per share of 7 cents for the first quarter of 2013. The financial strength indicators of the company are at satisfactory levels. The current ratio of 6.89 is better than the industry average of 1.56. The interest coverage ratio of -6.30 is worse than the industry average of 123.41. In terms of efficiency, the asset turnover ratio of 0.37 is worse than the industry average of 0.94; the inventory turnover ratio of 16.16 is at also falling short to the industry average of 54.73; and the ROE of -7.60% is lagging behind the industry average of 1.2%.

Valuation

TRLA PE is not meaningful due to negative earnings in the twelve trailing months. TRLA's current Price/Sales of 9.01 is above the average of its industry of 3.95. TRLA’s head to head comparison to its main competitor shows that the company has comparable gross margin in comparison to its main peers, and one that is above the industry average. The operating margin is the lowest results compared to the achieved operating margins of the selected peers, but it is above the industry average operating margin. The company has recorded higher quarterly revenue growth rate than the selected peers achieved growth rates, and also much better result than the 14% average growth of the industry. TRLA trades at much higher P/S ratio than MOVE, but at half the P/S ratio that Z is trading. The stock is currently trading below its intrinsic value of $44.12, this suggests that the stock is undervalued at these levels. The beta of 3.36 implies much higher volatility of the stock with respect to the S&P 500. TRLA has shown neutral earnings consistency over the last two years. The current quarter earnings in comparison to the same quarter last year have decreased by 400%. TRLA total Debt/Equity of 60.39 is above the required maximum, and it is above the industry average of 56.8. TRLA’s current price levels are above the maximum level, 35.86% below the 52 week high of $52.71, and the technical analysis give a neutral to negative view of the stock. The majority of the analyst ratings are outperform. TRLA currently does not pay any dividend.

About TRLA

Trulia, Inc. is a real estate search engine company. The Company offers free and subscription products that provide real estate professionals with access to transaction-ready consumers and help them enhance their online presence. As of June 30, 2012, the Company had more than 360,000 active real estate professionals in its marketplace, 21,544 of whom were paying subscribers. The Company's Website, www.trulia.com, is a search engine for buying and renting homes, advising homes and mortgages. The Company is headquartered in downtown San Francisco and is backed by Accel Partners and Sequoia Capital. Effective August 20, 2013, Trulia Inc acquired the entire interest of Market Leader Inc.

Competitor Comparison

Trulia, Inc. (NYSE: TRLA) N.V.

Highlights

Trulia, Inc. provides tools to research homes and neighborhoods for consumers through Web and mobile applications. The stock closed yesterday’s trading session at $33.81. In the past year, the stock has hit a 52-week low of $32.11 and 52-week high of $52.71. The intrinsic value of the stock is above the current price. TRLA has a market cap of $1.24 billion and is part of the Technology sector.

• Somewhat new industry and new concept    
• Market leader   

• Low margins

TRLA Intrinsic Value

Stock Valuation Model & Intrinsic Value Definitions

Investors should keep an eye open for stocks that are trading within 10% of their 52-week highs, as it is likely to continue in its upward trend. TRLA's 52 week high is $52.71, current price is $33.81, is 35.86% below the 52 week high.

The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which in this model states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. The company’s P/E ratio is not meaningful.

When there is strong insider ownership which we define as 8% or more, management is more likely to act in the best interest of the company, as their interests are right in line with that of the shareholders. Insiders own 56.64% of TRLA stock. Management's representation is large enough. This does satisfy our minimum requirement; companies that pass this test are more attractive to our valuation model.

The model is using several technical indicators (MACD, RSI, MFI, OBV, position Indicators) to forecast the trend of the stock for 6 and 12 months, and assign a value.

TRLA is trading in the range of $28.75 - $36.80 in the past 30 days. The stock has been showing support around the level of $28 and resistance in the $52 range. The stock is trading above the 50-Day Moving Average but below the 200-Day Moving Average. The RSI(14) is 51.88. After the consolidation phase from April to July, the stock made a quick run from around $35 to $55 in just two months. After the all-time high hit in mid-September, the stock has been in a downfall. It seems that the stock is currently finding some support at around $29, but there are still no clear cut signs that the bears are over with the stock.  Our indicators give a neutral to negative view of TRLA.

The financial health of the company the higher the better, we evaluate all the financial ratios of the company.

Investor’s sentiment for the stock.

The model assigns a value according to analyst’s recommendation for the stock. Analyst rating on Reuters.com is 2 Buy, 3 Outperform, 1 Hold, and 1 Underperform.

We are searching for EPS numbers that are better than the previous year's. One dip is allowed, but the following year's earnings should be higher than the previous year. TRLA’s annual EPS for the last 2 years were -0.87, and 0.54 this type of earnings action is neutral.

The company must have a low Debt/Equity ratio, which indicates a strong balance sheet. The Debt/Equity ratio should not be greater than 20% or should be less than the average Debt/Equity for its industry.  TRLA’s Total Debt/Equity of 60.39 is above the required maximum, and it is above the industry average of 56.8.

The EPS growth for this quarter relative to the same quarter a year earlier is above the minimum 15% that this model likes to see for a "good" growth company. Stocks with improving earnings are worthy of your extra attention. TRLA’s EPS growth for this quarter relative to the same quarter a year earlier is -400%, below our target.

This stock valuation model looks for annual earnings growth above 12%, but prefers higher than 20%. TRLA’s annual earnings growth rate over the past five years is not meaningful.

¹Tradespoon Score and Outlook: This score conveys Tradespoon’s long-term outlook of 1 to 5 years for a particular stock. Tradespoon uses proprietary methods to rate its trading picks on a scale from 1 to 10, with a 10 being the most favorable expected risk and return outlook. To determine a stock’s rating, Tradespoon uses an advanced algorithm that factors in fundamental and technical analysis to determine a stock's expected risk and return.