NEW YORK (TheStreet) -- Shares of Reliance Steel and Aluminum (RS) - Get Reportsoared this week to a high not seen in more than four months after the country's top metal-processing firm delivered on Thursday better-than-expected top- and bottom-line results for the first quarter of fiscal 2015 as well as a stronger second-quarter outlook.

The sudden 10% jump in the stock's price on Thursday (and further rise on Friday) is only drawing further attention to its recent rebound -- and prompting investors to take a closer look at a company whose shares were wallowing at a two-year low as recently as February. On Friday, Reliance share price reached $64.02, almost as high as their Dec. 8 level of $64.09. At the market's close, the stock was at $63.14, a rise of more than 3% thus far this year.

The question now is, Can Reliance's rally continue?

According to analyst Nathan Littlewood of Credit Suisse, the answer is yes. He currently has an outperform rating and a price target of $77 a share.

"Our view is that this thing is undervalued," Littlewood said. "They're in the metals and mining index, but this is not a steelmaking company and it has much better earnings quality than the steel makers."

Unlike most steel producers that have only a handful of production facilities, Reliance operates a network of more than 300 metals service centers in 39 states and 12 countries where it turns out more than 100,000 different products for an array of different customers.

Credit Suisse's Littlewood said Reliance Steel is not only a company that could benefit from a name change or a rebranding effort. But he also said Reliance stands out in contrast with industrial distributors such as Anixter International (AXE) - Get Report, W.W. Grainger (GWW) - Get Report and MSC Industrial (MSM) - Get Report

Littlewood is optimistic about continued deleveraging by Reliance, which he said has already begun to spend less on acquisitions and more on share buybacks.

Reliance reported a 17% increase in first-quarter earnings, to $1.30 a share, beating estimates of $1.02. Revenue rose 2.4% to $2.61 billion, slightly above forecasts. The company also said it expects second-quarter earnings of $1.10 to $1.15 a share, which can be compared with analysts' estimates polled by Briefing of $1.10.

"The gross margin performance was spectacular," said Keybanc analyst Phil Gibbs, who currently has a sector weight rating on the stock. "Revenues were exactly in line with my forecast, but what was materially different was the gross margins. I think that was pretty shocking to everyone."

For its part, Reliance credited its focus on "quick-turn orders, value-added processing and strong operational execution" for being able to maintain gross profit margins of about 25% despite a challenging environment that saw the average selling price decline 3.6% from year-ago levels.

Going forward, the key issue that investors will have to address is whether the global metals pricing environment will worsen or improve.  Analysts say some signs of improvement are already being seen for iron ore, but that has yet to spread to other areas like aluminum or steel.

Reliance is expecting its margins will come down in the second quarter but, even so, Keybanc's Gibbs pointed out that, if nothing else, the first-quarter results "clearly showed they can manage through a pretty challenging environment." The question, he said, is whether or not that's "sustainable." 

When the next quarter's numbers are released in July, this will be under the supervision of a new chief: COO Gregg Mollins is set to become president and CEO as of May 20.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.