It didn't take long for a trio of newly public specialty retailers to get a hold of Wall Street's heart strings. Analysts are touting these new stocks as growth machines, and impulsive investors have developed puppy love.

"So many investors are just focused on

Target

(TGT) - Get Report

when it comes to retailing, and they get all excited about a 12% gain," said Pacific Growth Equities analyst Andy Graves. "But they're forgetting about the kind of money you can make in these specialty retailers that are growing like gangbusters. Just look at stocks like

bebe

(BEBE)

or

American Eagle

( AEOS) and

Abercrombie

(ANF) - Get Report

. These stocks have doubled and tripled."

Just out of the gate, several new stocks wouldn't mind repeating the trick.

Zumiez

(ZUMZ) - Get Report

, which sells clothing and gear for extreme sports fanatics, listed on the Nasdaq in early May, the stock has roared over 28%.

Citi Trends

(CTRN) - Get Report

, a discounter of urban-style apparel that went public in mid-May, has posted a gain of over 50%.

DSW

(DSW) - Get Report

, the discount footwear chain, listed on the

New York Stock Exchange

, has added more than 10% in about a month.

Coming soon is golf-equipment retailer Golf Galaxy, which plans to raise up to $46 million with an underwriting group led by Piper Jaffray. It will trade on the Nasdaq under the symbol GGXY. Also, while it is not a retailer, a manufacturer of extreme sports gear called

Volcom

( VLCM) went public last month. Its shares have since jumped 17%.

The spat of IPO activity reflects bullishness about niche retail, but investors should think carefully before getting on the bandwagon now. For one thing, fondness for specialty retail is not Wall Street's latest thing; optimism for the space is obvious in the companies' valuations. Moreover, what little research coverage that exists on the offerings comes from firms that also served as underwriters on the IPOs, such as Piper Jaffray, Wachovia Securities, William Blair & Co., S.G. Cowen and Davidson & Co.

All four firms covering Zumiez, for instance, have an investment banking relationship with the company and either a buy or outperform rating on the shares.

This isn't to say Zumiez doesn't have compelling qualities. It posted a 10.7% jump in same-store sales in June from the same month last year. Its total sales for the month were up 29.4% to $15.3 million.

In addition to sales momentum, William Blair analyst Sharon Zackfia said the retailer has bright prospects for growth in the coming years. She noted in a recent research note that the extreme sports market has exploded into a $12 billion industry, driven by a surge in the popularity of skateboarding and snowboarding after ESPN's first X Games in 1995 and the addition of snowboarding as an Olympic event in 1998.

"From just 146 stores today, we believe Zumiez can expand its store base nearly fivefold to approximately 800 units, implying nearly a decade of growth at the current rate of expansion," Zackfia says. Her firm makes a market in shares of Zumiez and has an investment banking relationship with the company.

"Furthermore, we believe appropriate non-mall-based venues could bolster Zumiez's ultimate store potential to closer to 1,000 units," she says.

Meanwhile, a comparable mall-based competitor,

Pacific Sunwear

(PSUN)

, currently has 765 stores.

Zackfia said Zumiez could increase its operating margins from last year's 7.8% to double digits in the next five years -- a level it achieved previously before it began its aggressive store expansion. That, combined with annual sales growth of 23% to 25%, could power the company's bottom line to grow by 30% annually over the next three to five years, Zackfia estimated.

Next year, Wall Street expects the retailer to earn 94 cents a share, a 27% over estimates for this year, according to consensus estimates reported by Thomson First Call.

By comparison, Pacific Sunwear is expected to earn $1.87 a share in 2006, up 15% from this year's estimates. Its sales are expected to increase by an average of 15% annually over the next three years. Meanwhile, Zumiez's stock trades at around 33 times its earnings estimates through 2007. Pacific Sunwear trades at only 12 times forward estimates.

On Citi Trends, Piper Jaffray analyst Jeffrey Klinefelter downgraded it from outperform to market perform last week, despite a blowout same-store sales increase in June of 14.5%. Klinefelter had been expecting a gain of only 6% to 8%, and he still has high hopes for the company's top-line momentum in the coming months. He even raised his earnings estimates for the retailer for 2007. Still, all the good news was priced in at 29 times earnings estimates for the next two years.

Klinefelter's firm makes a market in shares of Citi Trends and has an investment banking relationship with the company.

Wachovia Securities analyst Joseph Teklits said in a research note that Citi Trends operates 216 stores in 12 states with the potential to open over 700 stores. Based in the Southeast, the retailer caters to low-income, urban customers, a market that Teklits says is "underserved by major retailers" and growing fast. His firm has an investment banking relationship with Citi Trends.

Notwithstanding the high multiples sported by these fledgling stocks as their underwriters talk them up, a case can be made that it's still early in the cycle for niche chain stores.

Pacific Growth Equities analyst Andy Graves said the flurry of IPOs shows how much potential growth still exists in specialty retailing. While targeting specific customers, particularly fashion-conscious teenagers and young adults, is an old idea, he said the market's potential has yet to be fully realized.

"From teen-agers to college kids to young unmarried professionals, there is a huge, growing population of consumers with various sets of sensibilities that have a lot of money to spend and a high propensity to spend it," Graves said.

Zumiez, Volcom and Citi Trends have stakes in a market that has long been exploited by Wall Street stars like

Aeropostale

(ARO)

,

Guess?

(GES) - Get Report

and

Urban Outfitters

(URBN) - Get Report

.

Graves believes more IPOs are on the way.

Speculation has been swirling on Wall Street that

J. Crew

, a fashion cataloguer and retail chain that is currently owned by the

Texas Pacific Group

, soon will be testing the waters in the public market.

Forever 21

is another name circulating, and European apparel retailers such as

H&M

and

Zara

are catching on in the U.S. and could be IPO candidates.

Graves said these companies are targeting college graduates making $50,000 to $80,000 a year, whose only expenses are rent and maybe a car.

"These kids are just blowing all the money they make on the most recent fashion items," Graves said. "That demographic is growing very quickly in terms of numbers."

Also, teen-agers who live with their parents are another attractive group as a hedge on the economy.

"Teenagers really couldn't care less about what's on the news at night," said Graves. "They just care about looking good, fitting in and creating their own identities. And kids have a lot of money to do that nowadays.

"If the economy rolls over, they'll be the last group to stop spending," he added. "That's for sure."