SMART Global Holdings, Inc. (NASDAQ:SGH) were trading more than 18% higher on Wednesday following the company’s reported solid Q4 results, with impressive gross margin improvement and generally in line revenue.

The company’s gross margin improvement was well ahead of guidance and also ahead of the long-term financial framework set forth in the company’s analyst day in April.

Analysts at Deutsche Bank view this improvement as a result of solid execution, favorable mix in IPS, and benevolent pricing in LED, mentioning they are encouraged with the transformation story of the company and see the potential for the stock to re-rate higher.