Seeking Alpha
IPOdesktop, IPOpremium (413 clicks)
Value, IPOs, long only
Profile| Send Message| ()  

Based in San Francisco, CA, Trulia (TRLA) scheduled a $90 million IPO with a market capitalization of $396 million at a price range mid-point of $15, for Thursday, September 30, 2012.

Seven IPOs are scheduled for the week of September 17. Full IPO calendar available here.

TRLA S-1 filed September 7, 2012.

Manager / Joint Managers: J.P. Morgan/ Deutsche Bank Securities.
Co Managers: RBC Capital Markets/ Needham & Company/ William Blair.

SUMMARY
TRLA competes with Zillow (Z) and realestate.com and is priced at a discount to Zillow by some metrics. Z in the past three months ranged from a low of $32 and a high of $45, and is trading around $45.

Z has been recently profitable while TRLA appears to be on the path to breakeven. 68% of TRLA's revenues are from re-occurring subscriptions.

CONCLUSION
Based on increasing top line revenue and a reduction in operating losses, TRLA appears to be a decent speculation going forward, assuming the housing market does come back.

Therefore, IPOdesktop believes TRLA will increase somewhat from its IPO price.

One concern, however, is that it seems likely that any success pattern developed by TRLA will be copied by Zillow.

Compare

IPO Mrkt

Price /

Price /

Price /

Price /

annualizing June 2012 qtr

Cap (MM)

Sales

Earnings

BookValue

TangibleBV

Net Profit %

Trulia

$396

5.82

-32

6.2

6.5

-18%

Zillow

$1,200

10.79

226

10.6

17.6

5%

OVERVIEW
TRLA competes with Zillow and Realtor.com and provides real estate residential information to professionals and offers services like Trulia Local Ads and Trulia Pro.

TRLA expects to gain from a recovery in the U.S. housing market. Sales of single family homes rose 4 percent to 337,000 and housing indicators showed sign of recovery in the first quarter of 2012, according to a report by U.S. Housing Market Conditions.

TRLA is backed by private equity firms including Accel Partners and Sequoia Capital.

METRICS
68% of revenue is recurring from subscriptions.

For the six months ended June 30 compared the six months ended June 30, 2011:

  • Subscribers up 50%
  • Revenue per subscriber up 44%
  • Marketplace (subscription recurring rev) up 122% to 68% of revenue, from 54% of revenue for the six months ended June 2011. (p49)

Operating loss for the June quarter was -18%.

MOBILE PRODUCTS
During 2011 and in the six months ended June 30, 2012, TRLA's mobile products accounted for 14% and 20% of total traffic, respectively.

TRLA currently monetizes mobile offerings through its Trulia Mobile Ads subscription product for real estate professionals and through a mobile website, m.trulia.com.

TRLA monetizes mobile applications principally through its Trulia Mobile Ads subscription product through which real estate professionals can purchase local advertising on mobile applications and on the mobile website by zip code or city and by share of a given market.

TRLA monetizes its mobile website through the sale of display advertisements and also provides subscribers rotational placement in a local lead form that appears on certain pages of the mobile website.

RECENT NEW LAUNCHES
In December 2011, TRLA launched Trulia for Agents on the iPhone, a mobile application dedicated to helping real estate professionals. Key features of the application include "check-ins" and lead notifications.

In May 2012, TRLA launched Trulia Mobile Ads, an innovative marketing product that allows real estate professionals to target consumers who are researching homes on mobile devices.

5% PLUS SHAREHOLDERS
pre-IPO
Accel IX L.P. 24%
Fayez Sarofim Investment Partnership No. 5, L.P. 20%
Sequoia Capital XII, L.P. 11%.

USE OF PROCEEDS
TRLA expects to net $78 million from the sale of 5 million shares. Shareholders expect to sell one million shares.

IPO proceeds are allocated for working capital and other general corporate purposes.

Source: IPO Preview: Trulia (TRLA)