What happened

Shares of communication and network company Ondas Holdings (ONDS 3.85%) jumped sharply on Monday. The stock soared as much as 23.8% and was up about 19% as of 10:45 a.m. EST.

The tech stock's gain was driven by an analyst's move to initiate coverage of the stock with an outperform rating and a big 12-month price target.

A chart showing a stock price rising.

Image source: Getty Images.

So what

On Tuesday morning, Northland Securities analyst Michael Latimore set a $22 12-month price target for Ondas stock. Highlighting how significant this target is, it represents 40% upside from where the stock is trading now -- even after its big pop today.

Supporting his bullish view for the stock, Latimore says there's a large market opportunity for the company in the railroad business as U.S. railroads install broadband networks. 

Now what

Ondas develops a proprietary, software-based wireless broadband technology for industrial markets like the railroads. Earlier this year, Ondas announced its first commercial shipment of its Mercury radio platform for a North American Class 1 rail customer.

In the company's Jan. 5 press release about its shipment, management said mission-critical network operators in industrial markets "are confronting a significant bandwidth gap for their advanced data applications located at the edge of their networks." The company's platform aims to address this problem, creating "a secure, high-capacity, private 'fog' network at the edge to enable these advanced applications with up to 15 times more capacity."