Shares of Snap Chat’s parent company Snap Inc. were climbing higher on Thursday after Pivotal Research said the company had “turned the corner” on a key metric.
According to analyst Michael Levine, Snap is improving on user growth following its launch of a redesigned Android app earlier this year.
Levine upgraded the stock citing that user momentum as one reason. The analyst has upgraded shares from “hold” to “buy” and remarked, “We don’t want to miss the inflection point in the business, despite already strong year-to-date performance.”
“We think the latest launch of lenses is among some of the most impressive product innovation we have seen in some time from the company,” Levine wrote. The analyst said that this aspect of Snap’s business is “less appreciated based on our industry checks.”
“We continue to hear glowing things about the organization under Jeremi Gorman,” Levine wrote of Gorman, the company’s new chief business officer. Gorman began his new position in late 2018 after spending years on Amazon’s advertising team.
“That we are already seeing better focus on ad agency relationships and a category-focused sales team — exceptionally low-hanging fruit — suggests alignment is moving in the right direction,” Levine continued.
The analyst raised his price target on the stock to $17.25 from $13.25.
Snap shares have climbed more than 150% so far this year.
Disclaimer: We have no position Snap Inc. (NYSE: SNAP) and have not been compensated for this article.