What happened

Shares of ATI Physical Therapy (ATIP -6.43%) stock (I'll give you three guesses what they do for a living) roared ahead 23% as of 1:20 p.m. ET Friday.

You can thank investment bank Jefferies for that.  

White rocket zooming up like a stock on a blue chart.

Image source: Getty Images.

So what

In a note out this morning, Jefferies announced that it is upgrading shares of ATI Physical Therapy to buy, and assigning a $5 price target to the shares, implying ATI could go up another 35% before this year is done.

According to a write-up on TheFly.com, Jefferies relies on proprietary data it has collected which show that foot traffic is improving month by month in ATI clinics, with both visits and volumes up, indicating that at this stage in the pandemic, "the worst is past" for ATI.

Now what

According to data from S&P Global Market Intelligence, 2019 revenue at the company was $763 million, and growing in the high-single digits before 2020's pandemic brought it crashing down 25%. It remains to be seen precisely how long it will take for ATI's business to return to pre-pandemic levels. Most analysts on Wall Street, though, don't anticipate a return to pre-pandemic revenue before 2023.  

That being said, at current valuations, ATI stock sells for only about one times trailing forecast revenue. When compared to similar businesses such as The Joint Corp. chiropractic, for example, the stock of which costs more than 10 times trailing revenue, ATI stock sure looks cheap -- and that's why Jefferies is upgrading ATI stock today.