It’s time to buy China-based online social and entertainment firm Hello Group , according to UBS. Analyst Felix Liu upgraded Hello Group to buy from neutral, saying the stock is due for a rebound after its poor first quarter guidance weighed on the firm. He cited improving year-over-year comparisons, better cost discipline and China reopening for the bullish outlook. “[We] think the worst is over following the weak Q123 guidance,” Liu wrote on Friday. “We expect a sequential earnings recovery from Q223 given: 1)easing YoY comparison for the livestreaming business due to regulatory changes on tipping in May 2022; 2) a recovery in offline-dating-related value-added service (VAS) revenue on China’s reopening; and 3) cost discipline.” MOMO 1D mountain Hello Group shares 1-day Hello Group shares are down 8% this year. Among the factors weighing on the stock in the first quarter this year include broadcast disruptions from Covid, as well as lower online media consumption due to the Chinese New Year holiday in the first quarter, according to the analyst. However, Liu hiked his 12-month price target to $12.50 from $4.80. The new target implies shares could jump 60% from Thursday’s closing price. Hello Group shares climbed 5.7% during Friday’s trading session. He said Hello Group shares are currently trading at a multiple that is “the lowest among profitable internet firms,” limiting downside ahead. “We find the current share price attractive, considering Hello’s fundamentals are bottoming and it has a record of returning profit to shareholders (9% dividend yield in 2023E and a US$200m buyback programme to be executed until June 2024),” Liu wrote. Liu was not the only analyst who recently upgraded Hello Group. Earlier this month, JPMorgan analyst Daniel Chen upgraded the firm to overweight from neutral , saying it can capitalize on China’s live streaming sector that’s set to return to form this year. —CNBC’s Michael Bloom contributed to this report.