Shares of Santa Ana-based STEC Inc., a maker of memory products for industrial uses, soared Tuesday after an analyst upgraded the stock.
The stock rose about 20% on a market value of $430 million.
Analyst Daniel Gelbtuch of CIBC World Markets set STEC’s shares at an “outperform” rating and boosted his target price to $9 a share, according to an Associated Press report.
STEC was trading at about $8.50 on Tuesday.
Gelbtuch raised his profit outlook for STEC from roughly $20 million to $22.4 million for 2008.
He cited an STEC line of high-profit memory storage devices as one reason why he expects “a very strong 2008” for the company, according to a report.
The upgrade is a boost of confidence for STEC, formerly called SimpleTech Inc.
Back in May, it issued profit warnings for the March quarter, citing historically low prices for memory chips this year and weak demand at its largest customer.
It didn’t name the customer.
Despite the warnings, STEC’s results for the March quarter still beat analyst’s expectations.
For the June quarter, analysts are looking for profits of $997,200 on sales of about $42 million.
