Nanosphere shares rose $1.73, or 13.9 percent, to $14.15 in morning trading. The stock has traded between $11.92 and $22.04 since the company's initial public offering priced at $14 on Oct. 31.

In a note to investors, Piper Jaffray analyst William R. Quirk said he expects Nanosphere's technology, expanding test portfolio and easy-to-use instrument format to enable the company to achieve long-term revenue growth.

Quirk initiated coverage of Nanosphere with a "Buy" rating and $17 price target.

Credit Suisse analyst Kristen Stewart began coverage with an "Outperform" rating and a target price of $22. Stewart noted that Nanosphere's nanoparticle technology improves on current technologies by offering direct detection, high sensitivity, and by performing both genomic and protein tests.

Stewart said the company is an attractive investment for long-term investors with higher risk tolerances.

Leerink Swann analyst Bruce Cranna initiated coverage of the company with an "Outperform" rating and a 12-month price valuation range of $16 to $18.

"In our opinion, Nanosphere will be a key player in an industrywide shift toward decentralized molecular testing -- specifically, the movement toward highly accurate, fast, closer-to-patient applications," Cranna wrote in a research note.

The analysts also noted the company's strong pipeline and growth potential.

Quirk said he expects Nanosphere to launch a steady flow of tests in the coming years.

Stewart estimated that Nanosphere product sales could increase to $110 million in 2011 and reach $200 million in 2012. In its prospectus filed with the Securities and Exchange Commission, Nanosphere reported 2006 product sales of $131,660.

"We believe Nanosphere's pipeline holds substantial value," Cranna said.