Why Trulia (TRLA) Is Falling Today

NEW YORK (TheStreet) -- Trulia (TRLA) was falling 15.8% to $30.67 Friday after reporting quarterly earnings that didn't meet analyst estimates.

The online real estate listing provider reported earnings of 3 cents a share for the fourth quarter. Analysts surveyed by Thomson Reuters expected earnings of 8 cents a share. The company reported revenue of $49.7 million, compared to the $49.6 million analysts expected.

Trulia attributed the lower earnings to marketing expenses. The company plans to launch a new marketing campaign targeting mobile users in the first quarter.

The company forecasts full-year revenue between $245 million and $248 million.

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TheStreet Ratings team rates TRULIA INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TRULIA INC (TRLA) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 analysis by TheStreet Ratings Team goes as follows:

  • TRLA's very impressive revenue growth greatly exceeded the industry average of 16.7%. 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.
  • You can view the full analysis from the report here: TRLA Ratings Report

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