Snap shares' 60 percent plunge in 2018 might finally present a buying opportunity.

Cowen upgraded Snap to market perform from underperform on Thursday, seeing more reasonable valuation after last year's brutal loss.

"While user growth and competitive issues remain, given 60 percent share decline since last year, Snap's valuation is a bit more reasonable," Cowen's John Blackledge said in a note to clients Thursday.

The company's shares have significantly underperformed the market amid slow user growth and increased competition in the social media space. Snap's stock has risen about 13 percent in the new year.

Shares of Snap climbed 2.7 percent to $6.45 in premarket trading on Thursday after the Cowen call.

Cowen expects Snap's daily active users to grow 5 percent from 2019 to 2024 and also predicts advertising growth to drive revenue and incremental margins. The analyst kept his 12-month price target unchanged at $6.

For 2019, Cowen forecasts revenue of $1.5 billion for Snap, 2 percent lower than its prior estimate and 1 percent below consensus.

"Our estimates are below consensus. Per our recent ad buyer survey, Snap was lowest Social platform in key attributes and performed poorly in data and user targeting," the note said.

Disclosure: CNBC parent NBCUniversal is an investor in Snap.



