NEW YORK (TheStreet) -- Shares of InvenSense (INVN) were surging 11.98% to $7.62 on heavy trading volume late Friday morning after Pacific Crest hiked its rating on the stock to "overweight" from "sector weight."
The firm has a $9 price target on shares of the San Jose, CA-based maker of gyroscopes used in smartphones.
The rise of the Pokemon Go game and augmented reality will create a "significant growth opportunity" for the company, especially within mid-range smartphones, Pacific Crest contended. Users can't effectively play Pokemon Go without a gyro in their smartphones, the firm explained.
Pacific Crest said it sees opportunities within gyros and microlocation software in a 500 million unit total addressable market, with every 10% share adding 11 cents to the firm's fiscal 2018 per-share earnings estimate.
"We also see incremental tailwinds for INVN in 2H16 related to share gains at Samsung (SSNLF) on the Note 7 and a strong holiday ramp associated with drones, where the company's content continues to grow and OEMs are expected to introduce drones at price points down to $199," the firm added.
About 2.91 million shares of InvenSense have been traded so far today vs. the company's average trading volume of roughly 1.15 million shares a day.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D+.
InvenSense's weaknesses include its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: INVN
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.