Toshiba's chief executive and vice-chairman have resigned in the wake of an independent report on the company's 152 billion yen ($1.2 billion) accounting scandal, which accused the management of padding profits. But, nonetheless the engineering giant's stock has surged more than 6 percent Tuesday.
After the market close, Toshiba said CEO Hisao Tanaka and Vice Chairman Norio Sasaki would resign, with Chairman Masashi Muromachi taking over as interim CEO.
Over several years, Toshiba's operating profit was inflated by around 152 billion yen, in an accounting scandal that involved the company's top management, including the current and previous chief executives, an independent review said in a report Monday. That's around three times the company's initial estimate, according to a Reuters report.
Getting the bad news out appears to have eased investors' concerns about the stock.
"The total problem has been quantified and there's a likely chance the CEO will have to quit. That's been seen as the end of that," said Amir Anvarzadeh, director of Japan equity sales at BGC Securities.
"We don't really see the attraction for Toshiba, but every stock has its price," he said, adding that Tuesday's rally was likely driven by short-covering, or investors covering their bets against the share.
Read More Toshiba inflated profits by $1.2B with top execs' knowledge: investigation
The stock, which ended Tuesday up 6.1 at 399.9 yen, likely got another fillip from its sharp drop -- it's down still down around 20 percent since early April, when Toshiba first disclosed the investigation.
"They've been killed," Anvarzadeh said. "It has been massively oversold."
But that's not necessarily a signal to buy the shares.
"Toshiba really has spent the last 20 years trying to grow first in electronics, and then when that failed, to go back and try to grow its power systems business," Damian Thong, a senior analyst for Japan technology at Macquarie, told CNBC. "Growth is at something of an impasse at the moment, with both areas running into problems."
Thong expects the leadership changes at the company could be "quite extensive," leaving a question of who will take over the helm.
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"Whoever comes in will have to really bring the morale of the company back up and really fight harder in the real markets outside. This is a big challenge for them and I don't think it will happen overnight," he said.
Thong has a neutral position on the stock, with a price target of 375 yen.
BGC's Anvarzadeh also isn't optimistic on the company's outlook – especially when it comes to NAND memory cards.
"Even if you take away this scandal and look from a future earnings point of view, it looks like [NAND growth] will need to be tempered down because smartphone-related demand is slowing considerably. There are huge inventory issues in China likely to last to the end of the year. Western markets are saturated from a smartphone point of view."
He noted that even though Toshiba's joint venture partner SanDisk hasn't faced any scandals, its stock has also dropped -- down more than 40 percent so far this year -- amid a difficult NAND outlook.
Analysts' recommendations on Toshiba's shares have been "predominantly bullish and predominantly wrong," he said.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1