UPDATE: Morgan Stanley Initiates Trulia at Underweight on Slight Overvalue

In a report published Thursday, Morgan Stanley analyst Scott Devitt initiated coverage on Trulia TRLA with an Underweight rating.

In the report, Morgan Stanley noted, “Trulia is slightly overvalued relative to peers in our view, and we believe it should trade at a discount to Zillow. The improving housing market could be a rising tide that lifts all boats; Trulia could continue to grow subscribers and ARPU at strong rates even if it lags Zillow in adoption. Trulia uniquely benefits from the consumer shift in time spent to mobile, as mobile homebuyers are more attractive to agents due to their propensity to be in-market.”

Trulia closed on Wednesday at $29.35.