RealNetworks shares moved up $1.06, or 5 percent, to $22.25 Monday after Pacific Crest Securities upgraded the stock from a "buy" rating to a "strong buy."
RealNetworks (Nasdaq: RNWK), which will report its third-quarter earnings Tuesday, watched its stock fall to a 52-week low of $16.63 last week after online advertiser DoubleClick (Nasdaq: DCLK) offered a gloomy outlook for the next few quarters.
Declining online advertising sales have caused investors to unload shares of RealNetworks, Yahoo! (Nasdaq: YHOO) and DoubleClick in the past few months.
"I think a lot of portfolio managers are pressing the panic button and are looking to raise some cash. But they are overlooking the long-term strength of this company," David Bench, an analyst with Arnhold & S. Bleichroeder, told Reuters.
WR Hambrecht analyst Bill Lennan predicts RealNetworks will earn 4 cents a share on sales of $67.2 million.
He's expecting software sales of $40 million, $14 million in services sales and $13 million in advertising sales.
Lennan rates the stock a "buy" and maintains a 12-month price target of $62 a share.
Last quarter, RealNetworks earned $10.6 million, or 6 cents a share, on sales of $62.7 million.
First Call Corp. consensus expects it to earn 4 cents a share in the third quarter.
The stock peaked at $96 in March.
Twenty-six of the 27 analysts following the stock rate it either a "buy" or "strong buy" recommendation.