Cowen Inc. (NASDAQ:COWN) shares soared 13% after Nomura increased the stock price target to $16 from the previous price target of $13. The firm believes stronger revenue growth in the latest quarter improves the upside potential of Cowen shares.

Currently trading around $14 a share – its market capitalization hovers around $459 million. The stock has the 52-week trading range of $11.63 – $18.25. COWN share price dipped 3% last year, down more than 21% in the past three years.

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Is Cowen Heading for Sustainable Growth?

The company’s top line performance impressed investors. Cowen topped revenue estimates for the fourth quarter by $6.41 million. Fourth quarter revenue of $223 million increased 68% compared to the same period last year, supported by strong growth in equity earnings.

The company’s strategy of improving the revenue base through diversification in both sector and product is working. Its advisory revenue increased 56% year over year to $41.8 million in the final quarter. The company also generated three-fold growth in brokerage revenue.

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Jeffrey M. Solomon Chief Executive Officer of Cowen said, “A primary goal of 2017 was to take definitive steps to make the firm more sustainable over the long term. We completed a transformative acquisition that positions us well for the new post-MiFID II environment. We experienced positive returns on prior operating investments in certain areas and made meaningful progress in our multi-year goal of diversifying our revenue streams.”

Share Price Has Upside Potential

Price target hike from analysts provided support to bullish sentiments; the stock looks attractive trading at around 0.69 times to sales ratio and 0.50 times to book value, relative to the industry average of 2.25 and 3.23 times, respectively.

The company’s stock appears significantly undervalued considering the book value and tangible book value per share. According to the latest earnings report, its book value per share stood around $21.82, while tangible book value per share was at $18.77.

Moreover, Cowen shares are likely to get the support from the shares buyback program. Recently, the company announced a buyback program of $23.6 million, increasing the total buyback program to $25.0 million.

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