What happened

Shares of outdoor sporting goods supplier Vista Outdoor (NYSE:VSTO) are up 8.4% as of 3:15 p.m. EDT.

So what

This morning, investment banker DA Davidson announced a big upgrade on Vista Outdoor stock. Hiking the stock's rating from neutral to buy, Davidson predicted Vista stock will hit as much as $29 per share within a year.

Why? According to the analyst, although Vista Outdoor has hit a rough patch of late, thanks to a "challenging retail environment" and "a slow hunting season," investors are now pricing Vista shares based on an "earnings trough" -- but one that won't last forever. As explained this morning in a note on StreetInsider.com, despite its temporary troubles, Vista remains "a leading outdoor and shooting brands portfolio company" and is likely to "restore peak earnings power over the coming years."

Investor rides bull market up

Vista Outdoor stock is surging. But why? Image source: Getty Images.

Now what

Assuming Davidson is right about that, of course, the time to buy the stock is before Vista's true earnings power is revealed and before the stock goes up in response to those earnings.

Doing this may require a leap of faith. After all, based on trailing earnings (rather, the lack thereof), Vista currently sports a negative P/E ratio.

That being said, with $64 million in trailing free cash flow, Vista stock only costs about 19 times its cash profits right now. With most analysts in agreement that Vista will be able to grow its profits at 25% annually over the next five years, once it recovers from last year's missteps, the time to buy might be right now.