It's all about location, location, location.
It wasn't enough. The stock opened at $22.10 shortly after this morning's opening bell.
It's a good time for a growing real estate website operator to go public. The housing market is finally showing signs of life, and larger rival Zillow
Trulia isn't perfect. It has yet to turn a profit, but it's certainly growing. Revenue climbed 91% in 2009 and 95% to $38.5 million last year. Revenue growth decelerated to 78% through the first half of this year, but that's obviously not too shabby. The lack of profitability may be a deal breaker to some investors, but that's nothing that a few more quarters of heady growth won't remedy.
With 26.3 million shares outstanding after this morning's IPO, Trulia opened with a valuation of roughly $580 million. In other words, it's already worth more than Realtor.com parent Move
Zillow is valued at a little more than double Trulia's market cap, and rightfully so. Zillow is bigger and growing even faster than Trulia. Oh, Zillow is also profitable.
Trulia's success this morning should've given a boost to the market's perceived value of Zillow, but that didn't happen. It will, as long as Trulia can sustain its IPO premium. Sector investing is a lot like real estate. If a pretty house moves into the neighborhood -- and Trulia certainly qualifies -- the value of the neighboring houses should start to rise.
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The Motley Fool owns shares of Zillow. Motley Fool newsletter services have recommended buying shares of Zillow. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.