Online auctioneer uBid Inc. (Nasdaq: UBID) stormed up 6 5/8, or 28 percent, to 29 7/8 Monday after Merrill Lynch upgraded the stock from "accumulate" to a near-term "buy" recommendation and set a 12-month price target of $50 a share.
Analyst Henry Blodget said uBid remains the leader in business-to-consumer auctions and is now entering into the business-to-business market as well.
"'Undervalued' is not a word that Internet analysts get to use very often. It is the only one, however, that we believe accurately describes the current status of uBid's stock," Blodget said in a research note.
After soaring to an all-time high of $189 a share in December, the stock fell to a low of 15 5/8 in August.
Market research firm Forrester Research estimates online auctions will become a $65 billion market by 2002, with $12 billion in business-to-consumer and $53 billion in business-to-business.
Last quarter, uBid topped analysts' estimates, losing $1.9 million, or 24 cents a share, on sales of $24.1 million.
First Call consensus pegs uBid for a loss of 51 cents a share in the third quarter and $1.85 a share in the fiscal year.
Both analysts watching the stock maintain a "buy" recommendation.