2011 has not been kind to Quantum (NYSE: QTM). The bulk data storage specialist's stock came out of 2010 with a market-beating 27% year in the rearview mirror, not to mention nearly tripling from yearly lows set in August. But a couple of weak earnings reports in January and July slashed share prices in half from those lofty yearly January levels.

A select few storage specialists, such as EMC (NYSE: EMC) and Dot Hill Systems (Nasdaq: HILL), have largely kept pace with the S&P 500 market benchmark in 2011, while others have fallen behind, including Seagate Technology (Nasdaq: STX) and Xyratex (Nasdaq: XRTX).

But few have suffered as badly as Quantum. Shares are down by 29% year-to-date despite a spirited 40% one-month rally in October.

Last week's earnings report capped that rally with a 7% single-day gain as Quantum's $0.06 of adjusted earnings per share tripled the average analyst expectation. It's not exactly progress, given that the year-ago earnings were exactly the same size. Management would like to underscore eight consecutive quarters of revenue growth, and there's something to be said for consistency.

The stratospheric trailing P/E ratio of nearly 300 looks scary, but on an adjusted basis that figure falls down to about 14 times earnings. There's also the buyout angle: Quantum's recently appointed CEO, Jon Gacek, just happens to have a history of merger and buyout deal management, the stock is temptingly cheap, and close partner NetApp (Nasdaq: NTAP) might want another helping of Big Data management expertise courtesy of a quick Quantum buyout. Crazier things have happened.

If the buyout scenario doesn't play out, the company runs the risk of becoming irrelevant as ever-faster and more agile storage systems take the traditional jobs of tapes and bulk drive systems. Will Quantum get its sea legs under it and start producing stronger earnings? The only way to find out is to stay on top of these storylines. Our handy watchlist feature will help you keep an ear to the ground with a steady flow of news and analysis: