The first supercomputers of the 1970s —  running a billion operations per second — monitored national security and researched nuclear energy. Current models handle 23,000 trillion calculations per second, explains Linda McDonough, editor of Growth Stock Strategist.

Managing today’s crushing mountains of un-crunched data means supercomputers have taken on a new luster, and Cray (CRAY) — the maker of these supercomputers — is having a resurgence.

Government customers, outfits like NASA or the National Nuclear Security Administration, have been Cray’s bread and butter.

While government agencies make good customers, their orders tend to be big and infrequent, wreaking havoc on the predictable growth Wall Street likes.

Now more commercial customers (as opposed to government agencies) use Cray’s supercomputers to analyze the tsunami of data landing on their servers.

Today, weather forecasters need teraflop power to warn us of increasingly volatile storm patterns. Hedge funds use supercomputers to predict commodity prices, and pharmaceutical companies need them to unravel how tumors grow.

The stock is cheap now—down from its 52-week high of $43.79—given a hiccup in production a a few months ago that trashed Cray’s stock price. In early May near term earnings were lowered due to a component shortage.

Cray has since secured those components, putting supercomputer shipments back on track. In late June, Cray announced new contracts for various supercomputers.

In February management suggested that the timing of the new chips meant half of 2016 revenue would occur in the fourth quarter.

The explanation didn’t satisfy investors. Cray’s share price fell 20% in May, when an additional 10% of annual revenue was pushed into the fourth quarter.

We think the market overreacted. Investors shouldn’t have been surprised about Cray’s well-documented lumpy revenue, which eventually boosts the bottom line, sometimes in a big way. Last year’s revenue benefited from $40 million in orders that shifted from 2014 into 2015.

Although Cray’s numbers are lumpy, the profits still add up on its balance sheet. As of March, the company had $320 million in cash and zero debt.

It generated $140 million in free cash flow last year and should grow earnings at least 20% in 2017. Our $40 target is based on a multiple of 22 on 2017 earnings per share of $1.80.

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By Linda McDonough, Editor of Growth Stock Strategist