Shares of Snapchat dad or mum Snap rose over 10% Thursday — to a six-month excessive — on an improve by a Wall Avenue analyst who’s turned bullish on the inventory, partly as a result of the app has shifted away from “clickbait/seedy influencer content material” to extra premium-produced content material.

In a word Thursday, BTIG Analysis analyst Wealthy Greenfield upgraded Snap from “impartial” to “purchase,” with a $15-per-share value goal primarily based revised monetary projections. It’s the primary “purchase” score from the analyst for the reason that firm’s IPO in March 2017. Shares had been up as a lot as $11.14 in morning buying and selling; word, nevertheless, the inventory remains to be effectively off its 52-week excessive of $17.97 and fewer than half its peak following the IPO.

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Among the many elements for his improve: Snapchat’s Uncover part has made a “significant discount” in content material with a “low-quality, clickbait/T&A really feel,” in favor of premium writer content material, which displays the change in Snapchat’s underlying content-recommendation algorithm. That ought to result in extra consumer time spent in Uncover and extra attractiveness to advertisers.

Primarily based on Snap’s bettering advertising-growth tendencies, Greenfield revised estimates for 2019 revenues upward to $1.65 billion for the yr (versus $1.four billion beforehand). He predicts an adjusted lack of -$268 million (up from -$500 million) and a internet lack of 71 cents per share (versus a internet lack of 92 cents prior).

Snap’s challenges stay, Greenfield acknowledged. These embrace chaos amongst its the senior administration staff and high-level exits, a botched redesign final yr, its delay in releasing a viable Android model of the Snapchat app, and a failure to acknowledge the specter of Instagram (which efficiently copied Snapchat’s Tales function). As well as, there’s a pending SEC and Justice Division probe into allegations that the corporate failed to supply necessary disclosures main as much as its IPO.

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In his revised estimates, Greenfield predicts unfavorable free money stream of solely $510 million for 2019 and “not imagine the corporate might want to increase capital subsequent yr, decreasing the monetary danger/menace of a DOJ/SEC settlement.”

“The excellent news for Snapchat is that efficiency promoting can scale quickly, enabling significant income beats,” the analyst wrote within the word. However, he added, “it’s vital for Snapchat to persuade greater high quality manufacturers of the efficiency ROI that may be discovered on the platform.”

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Different causes Greenfield cited for the improve: “consumer stickiness,” saying even the “big selection of missteps over the previous two years” has not led to a collapse of customers or utilization; proof that Snapchat’s newly rebuilt Android app (code-named Undertaking Mushroom) supplies higher efficiency; and improved morale.

Whereas “2018 was an terrible yr for Snapchat with morale at all-time lows,” Snap has made new senior govt hires over the previous few months which have boosted morale, in keeping with Greenfield. Particularly, he cited Snap chief enterprise officer Jeremi Gorman, previously head of Amazon’s international promoting gross sales, as burnishing the corporate’s notion amongst manufacturers and advertisers.

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