Lawson Software (NASDAQ: LWSN) provides software and service solutions to customers in manufacturing, distribution, maintenance and the service sector. Based in St. Paul, its offerings include performance management, supply chain management, resource planning, customer relationship management, asset management, and industry-tailored applications. In addition, the company offers consulting, training, and implementation services. It operates offices in North and South America, Europe, Asia, Africa, and Australia. Lawson has a well-developed system of business partnerships, which includes such firms as Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Microsoft (NASDAQ: MSFT), Office Depot (NYSE: ODP), Oracle (NASDAQ: ORCL) and Sun Microsystems (NASDAQ:SUNW).

The company pleased investors earlier in the week, when it issued upside guidance for fiscal fourth quarter results. Management now expects EPS of about 5-7 cents and revenues of $201-$208 million. Analysts had been looking for 4 cents and $193.60 million. Deutsche Securities and Davenport subsequently reiterated "buy" recommendations on the stock and declared price targets in the $12.50-$13.00 range. The stock popped into the initial stage of a bullish "pennant" consolidation pattern on the news. Prices frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the issue with six "strong buys," three buys" and one "hold." Analysts expect a 113% growth rate through the next year. The LWSN Price to Sales ratio (2.86), Price to Book ratio (2.41) and Sales Growth rate (118.02%) compare favorably with industry, sector and S&P 500 averages.

Institutional investors hold about 84% of the outstanding shares. Over the past fifty-two weeks, the stock has traded between $5.39 and $10.28. A stop-loss of $8.80 looks good here. Note that the firm is expected to report Q4 results on July 26th, after the close.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.