Shares of Aliso Viejo’s Quest Software Inc., a maker of business software, jumped Monday after the company was upgraded by an analyst on higher sales from the government.
At the close of New York trading, investors sent Quest’s shares up more than 9% on a recent market value of $1.6 billion. The stock was roughly flat in after hours trading.
Auriga USA LLC analyst Gregg Moskowitz upgraded Quest to “buy” from “hold.”
He also upped his price target on the stock to $20 per share, up from $17 per share.
The company was trading at around $18 per share on Monday.
“While our checks indicate Quest’s enterprise business remains sluggish, we believe the company’s government activity has picked up substantially and the company is thus likely to come in-line with consensus third quarter revenue expectations,” Moskowitz said in a report on financial news Web site streetinsider.com. “More important, we believe Quest is very well-positioned to deliver earnings upside next year and potentially sooner.”
For the current quarter, analysts are expecting Quest to post profits of $26 million on sales of $171 million.
A 2007 acquisition boosted the company’s brought sales of business programs to administrators at federal agencies looking to beef up computer security.
Quest, which makes software that boosts the performance of databases, e-mail and other programs, has gained more government business thanks to customers it inherited with its $90 million buy of Boca Raton, Fla.-based ScriptLogic Corp.
The company’s move into government software came during a period of declines in corporate spending on software amid the sluggish economy.
Quest has been going after the administrators at the departments of Defense, Homeland Security and Justice.
It has a public sector division in Maryland that targets federal, state and local government agencies, big school districts, colleges, universities and defense contractors.
