What happened

Shares of the consumer lending company Finance of America Companies (FOA 1.38%) are trading more than 22% higher as of 11:55 a.m. EST after an analyst upgraded the stock.

So what

Analysts at Raymond James upgraded Finance of America from an outperform rating to strong buy, and they also boosted its price target for the company to $13.50 per share. Finance of America currently trades around $8.94 per share following the boost this morning.

Additionally, Finance of America is set to join the Russell 3000 Index, which tracks the performance of 3,000 of the largest publicly traded stocks in the U.S., on June 28. This will give the stock more visibility, and other funds that track the Russell 3000 will need to buy the stock as well.

Green squiggly line moving upward.

Image source: Getty Images.

Now what

I think the big allure of Finance of America right now is that the company traded at a pretty decent discount to competitors prior to this recent pop. The company initially went public through a special purpose acquisition company (SPAC), and it began trading on the New York Stock Exchange just in early April, so it might have gotten caught up in the recent SPAC troubles.

For the first quarter of the year, Finance of America reported net income of $124 million, up 388% year over year. Total revenue in the quarter jumped 165% year over year.The mortgage market, a big part of the company's business, may be in a much tougher environment if inflation forces the Federal Reserve to raise its federal funds rate, but at below $10 the company does look somewhat cheap.