Shares of Snap notched their highest price in over a year on Monday after analysts at Wells Fargo released a bullish report on the stock.

The analysts upgraded the shares from equal weight to overweight and raised their price target from $8 to $22. Snap was trading around $15.75 as of market close Monday, the highest it has been since July 2022. The analysts said advertising at the social media company is trending up for the first time since April 2021, according to a note Sunday.

“We believe changes made over the past several months have meaningfully narrowed Snap’s ad product gap relative to other audience platforms,” the analysts wrote.

Snap shares closed up more than 4% Monday. The stock is up nearly 76% year to date.

The Wells Fargo analysts added that Snap’s recent changes to its products and leadership have been key to the company’s revenue reacceleration and innovation. Snap made strategic hires from rivals Google and Meta last year to help rebuild its ad business, they said in the note.

They believe the changes will help strengthen Snap’s bottom line.

“We see meaningful gross margin improvement in 2024 and beyond,” the analysts said. They forecast a 65% gross margin by 2027.

The rally follows Snap’s third-quarter earnings report from October that caused shares to briefly soar as much as 20%. CEO Evan Spiegel pointed to the company’s cost-cutting initiatives and its “positive growth.” Snap reported $1.19 billion in revenue, which came in above Wall Street’s estimates of $1.11 billion, according to LSEG, formerly known as Refinitiv.

“We are focused on improving our advertising platform to drive higher return on investment for our advertising partners, and we have evolved our go-to-market efforts to better serve our partners and drive customer success,” Spiegel said in a statement in the report.

— CNBC’s Michael Bloom contributed to this report.

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