Snap shares rose in pre-market trading on Wednesday, reversing an early decline after the Snapchat parent company reported third-quarter results that analysts said underlined its 2019 turnaround story.

The quarter was seen as validating the optimism that had been growing in the lead-up to the report. Jefferies wrote that the results show that Snap is “not a one-hit wonder”, while the upward trend in daily active users “shows the growth is sustainable”.

The results were not wholly positive for the social-media company. The revenue outlook was seen as light, although many analysts noted Snap’s history of being conservative with forecasts. Many firms also expressed valuation concerns after a 180 per cent rally in the stock off a December low, leading to some trimmed price targets.

Shares gained 3.9 per cent before the bell, though the stock’s initial reaction to the report had been negative. The stock is down more than 20 per cent from a recent peak, based on its Tuesday close, though it remains a strong year-to-date outperformer. – Bloomberg