PairGain Technologies back in favor

Shares of PairGain Technologies Inc. (Nasdaq: PAIR) moved up 1, or 7 percent, to 15 7/8 Thursday after Dain Rauscher upgraded the stock from a "hold" to a "buy" recommendation.

The telecommunications-equipment maker missed analysts' estimates in its latest quarter, returning a profit of $4.2 million, or 6 cents a share, on sales of $60.9 million.

Following the earnings miss, the stock slipped below $8 a share but has made a nice recovery in the past month.

First Call consensus expects the Tustin, Calif. company to earn 7 cents a share in its second quarter and 34 cents a share in the fiscal year.

Analysts said the price erosion in the T1 access market has improved this quarter and an upside surprise is not out of the question.

In the second quarter of 1998, PairGain earned $11.7 million, or 16 cents a share, on sales of $73.4 million.

The stock surged to a high of 20 1/8 in June before slipping to a 52-week low of 6 in October.

Ten of the 19 analysts following the stock maintain either a "buy" or "strong buy" recommendation.