Beeson Gregory, the investment bank, has put out a buy note on Radstone Technology, saying its stock could climb by 50% on the back of comparisons with competitors and strong market potential.
The company, which specialises in embedded computer subsystems for the military market, has a future which has "never looked so positive", according to Robert Lea, hardware analyst.
Radstone's order book stands at £60m, and the company has signed some high-profile contracts, including the flight computer in the crew recovery vehicle for the International Space Station.
Lea says that the company's nearest competitor, Canada's DY-4, is valued at more than twice Radstone's market capitalisation. This provides a strong argument for a re-rating of Radstone, whose stock currently stands at around 205p.
Beeson Gregory is now projecting sales growth of 35% to 2001 and 16% to 2002, and pre-tax profit growth of 33% to 2001 and 31% to 2002. The contract manufacturing arm is expected to see year-on-year sales up 84% to 2001.