Vonage's Stock Soars On Heavy Volume After Analyst Upgrade

Shares of Vonage Holdings Corp. shot up 12% to a three-month high in active afternoon trade Tuesday, after Citigroup turned bullish on the cloud-connected communications services company, citing an attractive valuation. With an hour left in the regular session, volume was 7.6 million shares, or nearly triple the full-day average. Analyst Michael Rollins raised his rating to buy, after being at hold for at least the last two years. He bumped up his stock price target to $8, which is 51% above current levels, from $4.75. "We now see a favorable risk-reward scenario with an opportunity to improve business revenue growth, harvest consumer cash flow and generate favorable [free cash flow] yield at over 10% on our 2017 estimate," Rollins wrote in a note to clients. The stock has now run up 36% over the past month, but was still down 7.1% year to date.