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NEW YORK (TheStreet) - Virgin America (VA)  has gained nearly 70% from its Nov. 13 offering price of $23. The stock was trading 8.6% higher to $38.91 on Wednesday following bullish comments by Wall Street analyst after initiating coverage on the airline best known for low fares and hip amenities.

San Francisco-based Virgin America, famous for its sleek, high-tech cabins catering to the business class, flies to roughly 20 airports in the U.S. and Mexico.

Here's what analysts are saying:

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Michael Lindenberg, Deutsche Bank (Buy; $44 PT)

We are initiating coverage of VA shares with a Buy rating as we think they represent an attractive means to invest in a low cost carrier that is pursuing a unique strategy: targeting price-sensitive business travelers and high-end leisure customers who ascribe value to a hip, high-tech, high-touch travel experience.

Focused on maintaining low cost advantage Virgin America is able to offer a lower price for its three-class product than its primary competitors (namely the traditional network carriers) due to its lower cost structure. This is largely accomplished by flying a single aircraft type (Airbus A320 family), high asset utilization, and outsourcing all functions that are non-passenger facing (e.g. baggage delivery, heavy maintenance, reservations, etc.). Ample opportunities for growth supported by 2015 - 2016 fleet expansion Given Virgin's size, it does not take much to "move the needle" with respect to growth.

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The IPO plus a concurrent restructuring of its debt had the effect of materially deleveraging the company's balance sheet resulting in a net cash position: on-balance sheet debt of $118 mm and cash and marketable securities of $399 mm. We believe that the improved credit profile of the company should result in lower aircraft ownership costs going forward. Despite recent surge, stock a Buy on lower fuel and introduction of 2016 EPS.

VA is focused on a business customer base while maintaining a low-cost operation. While new routes tend to take longer than most LCCs to spool up, the Virgin America model has proven successful in generating premium revenue in its most developed markets, from transcontinental markets (LA/San Francisco to NYC) to short haul California.

We see 17% upside potential in VA, 82% if fuel stays low and has limited revenue implications. VA is among the most levered to fuel in our coverage, due to: 1) limited hedging for 2015, 2) longer-than-average stage length with a heavy domestic focus, and 3) relatively low margins. The leverage to fuel more than offsets the competitive risks we see in transcon (New York in particular). With one of the widest distributions of route performance in our coverage, we think VA has the potential to out-pace industry margins as under-performing routes are brought to average performance.

Glenn Engel, Bank of America Merrill Lynch (Buy)

Virgin has one of the youngest fleets and most productive workforces in the sector, but invests heavily in its product, so its unit costs are slightly above low fare peers. VA delivers a more reliable and better-rated product than peers, but airline models based on ultra-low costs (SAVE) have outperformed value-for-money (JBLU). Large wealthy populations in Los Angeles and San Francisco seem well-suited to Virgin's product offering and provide many opportunities for expansion given the fragmented nature of supply in California. In addition, the Californian economy is likely to benefit from lower oil. However, VA's less diversified route structure leads to greater volatility and transcontinental routes become more competitive in 2015.

In its initial years, Virgin expanded quickly at the expense of cash flow, and even after restructuring/IPO, Virgin's leverage and capital costs are higher than peers. Since 2012, Virgin has emphasized returns over growth. Although expansion resumes in late 2015, in our view, Virgin will remain free cash flow positive. At 8x 2015E pretax and 6x 2015E EBITDAR, Virgin trades in line with other US point-to-point carriers, yet has greater leverage to lower oil prices and strong presence in valuable markets.

- Written by Laurie Kulikowski in New York.

Follow @LKulikowski