A monitor displays Snap Inc. signage on the floor of the New York Stock Exchange (NYSE) in New York.

Shares of social media company Snap jumped more than 8% on Thursday after Pivotal Research upgraded the stock in a rare midday call.

Pivotal Research increased its rating on the stock to buy from hold and hiked the target price to $17.25 from $13.25, saying it sees "increasing signs of momentum in the business." The stock is currently trading around $14 a share.

"We recognize that this is aggressive vs historical ranges, but there is a healthy amount of remaining skepticism about the business among investors, and we think a turn in usage and revenues could translate into a meaningful re-rating higher," Pivotal Research's Michael Levine said in a note to clients Thursday.

Shares of Snap are up more than 152% so far this year.

Levine said Snap's business is at an inflection point. Snap's user growth has turned the corner and estimates are too low.

He also said that advertising for Snap is "moving in the right direction." Pivotal is seeing better relationships with ad agencies and a "category focused sales team," since Snap's chief business officer Jeremi Gorman, former head of global advertising sales for Amazon, joined the team.

"We continue to hear glowing things about the organization under Jeremi Gorman," Levine said.

He added that Snap is "underpenetrated on media plans." After its initial public offering in March of 2017, Snap had a slowing in user growth and several quarters of disappointing earnings, causing the stock to fall nearly 40% in its first few months. This "negative narrative" turned advertising buyers away from the company, Levine said.

Pivotal has a 55% gross margin estimate for 2020, while Wall Street estimates 53% gross margins. Levine also expects total costs to accelerate next year.

Levine noted that Snap's push into "social gaming," announced at its partner day, is a good fit for its younger user base.

Snap closed down 6% on Thursday.