At the end of regular trading, the stock had gone up $2.50 to close at $18.38.
In research notes, Lehman analyst Neil Herman bumped up his rating on the company's stock to "outperform" from "neutral." Herman also increased his price target to $23 a share from $20 a share.
"PeopleSoft executives are increasingly upbeat, hiring aggressively and indicating that the pipeline in business is improving," Herman wrote. "We believe the forthcoming release of PeopleSoft's Web-based applications has the potential to excite Wall Street."
PeopleSoft competes against rivals Oracle, SAP and J.D. Edwards, which provide enterprise resource planning (ERP) software, or applications that automate a company's financial, manufacturing and human resources needs. Next week, PeopleSoft is expected to formally launch PeopleSoft 8, the company's long-awaited suite of Internet-based business applications, along with a slew of other new products.
Its competitors have also released Web-friendly versions of their core back-office software, including Oracle with Oracle 11i and SAP with its MySAP.com suite of applications.
Herman noted that with the release Tuesday of PeopleSoft's latest suite of applications, the company has an opportunity to steal back market share in the United States from struggling J.D. Edwards, SAP and Baan. Baan was recently acquired by United Kingdom-based Invensys.
"At a minimum, we believe the company has a great opportunity to sell these new modules into its existing base of some 4,400 customers," Herman wrote. "It also appears to us that PeopleSoft is the only major ERP company, outside of Oracle, that is successfully negotiating the move from the old world of client-server to the new world of Web-based applications."
Herman projects license revenues for PeopleSoft to be about $94.4 million but said there is a chance for revenues to come in above $100 million.
Yesterday, PeopleSoft's stock took a hit after shareholder Christopher W. Marble filed a lawsuit alleging that from April 1997 through January 1999, former PeopleSoft chief executive David Duffield and nine other executives sold "huge quantities" of PeopleSoft stock based on privileged information.