Is Martha Stewart's Run-Up a Good Thing?

That seems to be what's happening lately. On Tuesday, the judge in Stewart's case endorsed Stewart's decision to serve her sentence before her appeal is heard. On Wednesday afternoon, the company announced that it has signed a deal with Mark Burnett, the television producer behind such hits as Survivor and The Apprentice. Under the deal, Burnett will consult with the company to help develop upcoming television productions, including a revived edition of the company's signature Martha Stewart Living show.

As part of the agreement, Martha Stewart Living gave Burnett a warrant to purchase up to 2.5 million shares of the company's common stock at a price of $12.59 a share. The company's announcement confirmed a report in the New York Daily News on Tuesday.

Stewart's move to go to prison early removed some of the uncertainty about her fate that had weighed on the company's shares, analysts have said. At the same time, the collaboration with Burnett offers hope that the company might be able to rebound once she's out of the slammer.

But analysts have their doubts about whether these tidbits will help the company's fundamentals in the foreseeable future.

While Burnett has had great success with his shows, reviving Stewart's TV show would present a significant challenge, said Dennis McAlpine, who covers Martha Stewart Living as the managing partner of McAlpine Associates. The show was already struggling before Stewart ran afoul of the law, McAlpine said. Stewart's conviction has damaged her image, he said.

And Burnett's statement to the Daily News that he would focus on Stewart in the act of "helping people" leaves McAlpine scratching his head.

"I can't imagine anyone less suited to helping people than Martha Stewart," he said. "An Oprah Winfrey she's not. It would be very difficult to get a show that's good and that people would want to see other than for the curiosity factor." (McAlpine does not own shares of Martha Stewart Living, and his firm does not have investment banking business with the company.)

Martha Stewart Living posted its most profitable year in 2001, when it earned 45 cents a share. At the company's current stock price, it's trading at about 33 times earnings of that year, a relatively rich valuation for any company.