UPDATE: Goldman Sachs Upgrades Trulia to Buy, Raises PT on Expected Strong Fundamentals

In a report published Tuesday, Goldman Sachs analyst Debra Schwartz upgraded the rating on Trulia (NYSE: TRLA) from Neutral to Buy, and raised the price target from $33.00 to $38.00.

In the report, Goldman Sachs noted, “We upgrade Trulia to Buy from Neutral as we expect strong fundamentals driven by improved housing demand, mobile proving accretive to consumer usage and monetization, and an opportunity to accelerate agent growth with the acquisition of Market Leader to narrow the valuation gap between it and Zillow, its closest comparable. The April lockup expiration, in our view, has caused the stocks to decouple, having traded in a fairly tight EV/Sales band since Trulia's September IPO. With comparable forward 3-yr sales growth (35% TRLA, 37% Z), we expect Trulia to trade at parity with Zillow on EV/Sales, or 6.5X, which yields our new $38 12-month target price.”

Trulia closed on Friday at $29.47.