What happened

Shares of Snap (SNAP -0.13%) have jumped today, up by 11% as of 11:30 a.m. EDT, after the company received an upgrade from BTIG Research. Analyst Rich Greenfield has been a vocal skeptic of the Snapchat parent's turnaround prospects but is now changing his tune.

So what

BTIG had previously cut its rating on Snap to sell back in September, and then moved to the sidelines with a neutral rating in December. Greenfield is now boosting his rating to a buy with a $15 price target, despite noting that "virtually everything that could go wrong for Snapchat over the past couple years since going public has gone wrong." However, the analyst is encouraged that there has been a noticeable uptick in spending in North America by advertisers based in emerging markets, potentially taking advantage of low ad prices.

Check out the latest earnings call transcript for Snap.

Examples of the group calling feature on Snapchat

Image source: Snap.

There has also been a noticeable improvement in the quality of ads in Snapchat's Discover section, with a "meaningful reduction in clickbait/seedy influencer content and an increase in premium/publisher content," according to Greenfield. Snapchat remains incredibly popular with core users who use the platform for communications, and Snapchat still has potential to expand internationally. The company's progress in improving the app's performance on Android is also a welcome sign.

Now what

BTIG still has some reservations, most notably the investigations by the U.S. Department of Justice and the SEC over IPO disclosures. The outcome of those investigations could hurt Snap's cash position.

Greenfield has adjusted his estimates, and now expects negative free cash flow of just $510 million. He no longer believes that Snap will need to raise capital in 2020. The analyst is now modeling for 2019 revenue of $1.65 billion, up from a prior estimate of $1.4 billion. Looking farther out, Greenfield expects 2022 revenue to be $3.4 billion, up from a prior estimate of $2.1 billion.