What happened

Shares of Slack Technologies (NYSE:WORK) rose as much as 11.3% on Tuesday morning, hanging around just below the 11% mark at 2:45 p.m. EST. The business collaboration software expert was boosted by a bullish analyst report.

So what

Analyst firm RBC Capital started coverage of Slack this morning with an "outperform" rating on the stock and a price target of $25 per share. That's 19% above Monday's closing price. RBC analyst Alex Zukin cited Slack's market-leading brand power and unique technology, arguing that the company should be able to post revenue growth near 30% a year for the foreseeable future.

Silhouettes of several people helping each other climb a rocky hill or mountain, set against a bright yellow sunrise.

Will Microsoft help or hurt Slack as the collaboration market evolves? Image source: Getty Images.

Now what

Zukin also said that the workplace collaboration market is validated by the fact that mighty Microsoft (NASDAQ:MSFT) is chasing it with a heavy focus on its own Slack alternative, Microsoft Teams. The market could grow into an $88 billion annual revenue opportunity, the analyst noted, and Slack's first-mover advantage would be very valuable in that case.

That being said, Slack's shares have moved largely downward ever since the company joined the public stock market in the summer of 2019, and it trades 40% below its all-time highs -- which happened to fall on the stock's very first day of trading. Ironically, the same Microsoft Teams alternative that Zukin sees as proof of a massive market also drove Slack's shares down because it's a serious rival. Slack is a classic growth stock where its market value rests on sustainable revenue growth and best-guess estimates of profits and cash flow in the far future. That's why a single analyst note was able to lift its share prices more than 10% today.