Skullcandy Inc. shares soared Monday after a Roth Capital Partners analyst upgraded the headphone maker, citing its turnaround.
Analyst Dave King upgraded his rating on Skullcandy to "Buy" from "Neutral" and raised his price target to $7.50 from $5.50. He said in a research note that the new leadership's strategies "appear to be bearing fruit and new products are gaining traction."
Skullcandy hired a new CEO, Hoby Darling, in the spring and a new chief financial officer, Jason Hodell, this fall. It also has introduced a number of new products such as a Bluetooth-enabled mobile speaker, helping draw people back to the brand.
The Park City, Utah company, which makes colorful headphones and other audio accessories, remains a popular brand but has been dealing with increased competition.
King says Skullcandy, which is expected to lose money this year, is well positioned financially with no debt and money available to borrow. He expects the company's sales will improve in 2014 and raised his 2014 earnings estimate to 10 cents per share from breakeven. Analyst polled by FactSet, on average, were anticipating earnings of 9 cents per share for 2014.
Skullcandy's shares rose more than 8 percent to $6.54 by midmorning. Its stock had fallen 22 percent for 2013 as of Friday's close.