Trulia (TRLA) Showing Signs Of Perilous Reversal Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Trulia ( TRLA) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Trulia as such a stock due to the following factors:

  • TRLA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $65.8 million.
  • TRLA has traded 7.6 million shares today.
  • TRLA is down 3.2% today.
  • TRLA was up 8.5% yesterday.

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More details on TRLA:

Trulia, Inc. provides tools to research homes and neighborhoods for consumers through Web and mobile applications. The company, through its tools, also enables real estate professionals to market their listings. TRLA has a PE ratio of 203.7. Currently there are 3 analysts that rate Trulia a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Trulia has been 1.1 million shares per day over the past 30 days. Trulia has a market cap of $1.1 billion and is part of the technology sector and internet industry. Shares are up 70.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Trulia as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that net income has been generally deteriorating over time.

Highlights from the ratings report include:
  • TRLA's very impressive revenue growth greatly exceeded the industry average of 9.1%. Since the same quarter one year prior, revenues leaped by 117.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • TRLA's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.48, which illustrates the ability to avoid short-term cash problems.
  • TRULIA INC reported flat earnings per share in the most recent quarter. This year, the market expects an improvement in earnings ($0.62 versus -$0.12).
  • Compared to other companies in the Internet Software & Services industry and the overall market, TRULIA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 31.4% when compared to the same quarter one year ago, falling from -$1.69 million to -$2.22 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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