NEW YORK (AP) -- Shares of Trulia climbed in afternoon trading on Wednesday as an analyst raised the real estate website operator's rating and price target, saying a recent offering of stock leaves it in a better financial position.
THE BACKGROUND: Trulia Inc., which went public in September, operates the website Trulia.com and mobile apps that allow people to research home listings and neighborhoods, while helping real estate agents market their listings.
The San Francisco company recently completed an offering of about 7.1 million additional shares on behalf of the company and some shareholders. Trulia planned to use its proceeds for working capital and other general corporate purposes. It will get no proceeds from the sale of stock by shareholders.
THE ANALYSIS: Lloyd Walmsley of Deutsche Bank raised Trulia's rating to "Buy" from "Hold" and lifted its price target to $38 from $34. In a client note, the analyst said that the company is better positioned after the offering partly because it will have more cash for potential mergers and acquisitions.
Walmsley also said that he sees Trulia closing the gap between its stock price and that of rival Zillow Inc. The analyst said that he doesn't think that the disparity between Zillow and Trulia is warranted given Trulia's improving strategic position. Zillow's stock is up 42 percent over the past month, while shares of Trulia are up about 25 percent.
Trulia declined to comment on the analyst's client note.
SHARE ACTION: Trulia's stock gained 89 cents, or 2.9 percent, to $31.46 in afternoon trading. The shares have traded between $14.69 and $38.22 since the IPO. The stock is up about 88 percent for the year to date.
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