Shares of social media company Snap (NYSE: SNAP) rallied Thursday after one longtime skeptic upgraded the stock and told clients that it's set for outperformance thanks to better advertising sales.
BTIG analyst Richard Greenfield now recommends investors buy the beleaguered stock and thinks that the media sharing platform could see its shares soar 50% over the next 12 months.
"Your initial reaction is likely why now and what changed, as virtually everything that could go wrong for Snapchat over the past couple years since going public has gone wrong," Greenfield began.
"Performance advertisers are laser focused on return on investment and spend (and spend more) where they see a compelling return. We are increasingly confident that overseas direct response/performance advertisers are taking advantage of low relative bid prices on ad inventory in the U.S."
Greenfield has never had a "buy" rating on the shares, which went public in March 2017.
Moreover, there has been controversy regarding Snap, the subject of reports in the Wall Street Journal that the company paid settlements to at least three female employees last year after layoffs employees said disproportionately targeted women.
Six employees were cut from the growth and design teams, which work closely with CEO Evan Spiegel. All six were women. And the layoffs followed an internal email from a female engineer alleging a sexist culture at the company, which Spiegel later called a "wake-up call."
When some affected employees wrote letters asking why so many high-profile team layoffs were women, Snap reportedly paid at least three in extra shares and cash in addition to the normal severance package.
Snap shares advanced 73 cents, or 7.3%, Thursday to $10.78
