What happened

Automotive aftermarket specialist Holley (HLLY 3.26%) got another boost from Wall Street on Monday, and the shares are revving up as a result. Holley stock gained 12% on growing hope that the worst is finally in the rearview mirror.

So what

Holley is an auto parts manufacturer that caters to car enthusiasts, offering a range of products that allow owners to customize and modify their vehicles. It is a niche market, but Holley is a relatively large player in that market.

But for the most of the last year, Holley shares have been in the slow lane. The stock fell dramatically in July 2022 after the company released disappointing results and cut guidance.

There's a growing belief on Wall Street that Holley now has a stretch of smooth road up ahead, and the stock is gaining as a result. On Monday, Tesley Advisory upgraded Holley to outperform from market perform with a $7.50 price target. Analyst Joseph Feldman wrote that he expects a return to profit growth in the second half of 2023 and a strong 2024, saying the business seems to be at an "inflection point" where it has bottomed or is close to bottoming.

The upgrade follows similar actions by other Wall Street banks that have had the shares on an upswing in recent weeks.

Now what

Holley shares are now up 60% in the last month but are still 50% below where they traded back in the spring of 2022. The company has an established customer base and a good reputation among those customers, and with supply chain issues now behind it, it has room to accelerate.

The question, though, is how long that acceleration will take, and whether a slowing economy or rising rates could eat into those gains. Investors are understandably excited about the turnaround, but need to understand this stock might not be able to go from zero to 60 immediately.