According to UBS, it’s time to buy Hello Group, an online social and entertainment company based in China. Analyst Felix Liu upgraded Hello Group to buy from neutral, saying the stock should rebound after its poor first-quarter forecast weighed on the company. He cited improving year-over-year comparisons, better cost discipline and the reopening of China for the bullish outlook. “(We) believe the worst is over following weak Q123 guidance,” Liu wrote on Friday. “We expect a sequential recovery in earnings from Q223 given: 1) the easing of the year-to-year comparison for live streaming activity due to regulatory changes on tipping in May 2022; 2) a recovery value-added services (VAS) revenue related to offline dating in the re-opening Chinese market; 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 of this year were Covid broadcast disruptions, as well as a drop in online media consumption due to the Chinese New Year holiday in the first quarter, according to the analyst. However, Liu raised his 12-month price target to $12.50 from $4.80. The new target implies that shares could jump 60% from Thursday’s closing price. Shares of Hello Group climbed 5.7% during Friday’s trading session. He said shares of Hello Group are currently trading at a multiple that is “the lowest among profitable internet companies”, limiting downside risk. “We find the current share price attractive given that Hello’s fundamentals are at rock bottom and it has a history of returning shareholder profits (9% dividend yield in 2023E and a $200 million buyout to be executed through June 2024),” Liu wrote. Liu wasn’t the only analyst to update Hello Group recently. Earlier this month, JPMorgan analyst Daniel Chen moved the company from neutral to overweight, saying it could capitalize on China’s live-streaming sector which is expected to rebound this year. — CNBC’s Michael Bloom contributed to this report.