BOSTON (CNN/Money) - Ch-ch-ch-changes. David Bowie sang about them, and Napster is living through them.

The company that until Jan. 3 was known as Roxio, previously a maker of CD-burning software and devices, decided to try to strike it big as just a digital-music service.

Only a few years ago, Napster was a revolutionary free music-downloading service that the record labels sued out of existence.

Napster has come back as a subscription music service. For $9.95 a month, you can stream music to your PC.

You can also download songs -- Napster has 1 million in its library -- for 99 cents each ($9.99 for an album), as you would with iTunes or other music services.

It might seem odd that a company is trying to trade on the associations consumers have with a name that was once regarded as the scourge of the music industry -- and illegal to boot.

The new Napster thinks that the name has tremendous brand value. "We've done two studies with consumers," says Gene Munster, an analyst with Piper Jaffray. "Seventy-five percent of people recognized the Napster brand. It's recognized as one of the biggest brands."

Munster, whose firm has an investment banking relationship with Napster, rates the stock as outperforming the market, given the company's strong brand, a recent announcement that subscriber growth had increased 50 percent since the previous quarter, and news that devices that will allow Napster users to carry subscription music with them are coming out soon.

But the stock has declined 15 percent during the two weeks that it has traded under the symbol NAPS (Research).

What gives?

Munster blames hedge funds. "People started hearing that the company was changing its listing to Napster, and they expected a bid up when the switch happened," he says.

When that rocket didn't ignite, these players bailed, Munster asserts.

So is it time to pick up some of the stock?

Though I am a recent convert to subscription music (RealNetworks's Rhapsody is the largest service; other players include Yahoo's MusicMatch and Virgin Digital), I didn't much like Napster's sound quality, interface, or community features.

However, new devices will allow you to carry subscription music with you for $14.95 a month. Napster calls the service Napster 2 Go.

The catch: The music disappears if you cancel the subscription.

This portability will really boost subscriptions. "Our research shows that portability is the one single feature that users are really crying out for," says Napster CEO Chris Gorog. "It's the silver bullet for making subscriptions more widely adopted."

If that's true, here's why Napster benefits: About 72 percent of Napster's revenue last quarter came from its subscription service, vs. its per-song download plan.

While subscription music is a much smaller industry than digital downloads, like Apple's iTunes Music Store, it's a stronger business.

Operating margins for digital downloads are believed to be about 5 percent. For subscriptions, that margin stands at 10 to 15 percent. That's why Munster slapped the "outperform" rating and a $12 target price on the $7.78 stock.

Phil Leigh, an analyst with Inside Digital Media, says, "Apple made a misjudgment that there's no market for subscription services."

But Napster raises some significant red flags.

First, the company, with $61.1 million in cash on hand, burned through $29.9 million in operating expenses last quarter.

Chris Rowen, an analyst with SunTrust Robinson Humphrey, says profits are "not likely in the next year or so."

He has a "neutral" rating on the stock.

All of the analysts I spoke with, however, were quick to dismiss the recent injunction against Napster sought by SightSound, which claims Napster is infringing on its patents.

News of the injunction shot Napster stock down 9 percent, so a settlement could provide some nice upside potential.

When more portable devices come around and marketing dollars are spent to educate consumers that, yes, they can bring subscription music with them, services such as Napster should gain momentum.

Gorog says Napster will launch its portable subscription plan this quarter. "It will be supported with a substantial marketing campaign," he says.

Still, Napster is a risky play. "Investors with a decent appetite for risk ought to put a little money in Napster," Rowen says.

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