B. Riley FBR analyst Raj Sharma started Gain Capital with a Buy rating and $7 price target. The company has seen improved trading flows in Q2 and in the first two months of Q3 following weak Q1 results, Sharma tells investors in a research note. He believes this improvement in business trends, coupled with Gain Capital's "massive" operating leverage, can drive earnings higher at a faster pace than any increase in sales. Further, Gain could be an attractive acquisition candidate for one of its larger competitors, says Sharma. The analyst views the stock as "extremely undervalued."