Is The Street Finding An Appetite For Blue Apron?

Blue Apron Holdings Inc APRN has been one of the worst-performing high-profile IPOs in recent years, down more than 75 percent from its $10 IPO price last June. While Wall Street still isn’t getting bullish on the battered stock, it’s bearish sentiment may be softening.

Blue Apron stock rallied more than 9 percent on Thursday after it reported a smaller-than-expected earnings loss in the first quarter and said its subscriber count increased by 5 percent from a quarter ago.

Takeover Target?

Blue Apron's stock traded higher by more than 6 percent on Friday morning after CNBC contributor and "Shark Tank" star Kevin O’Leary on Thursday reiterated Blue Apron as a potential buy and said the stock is a potential buyout candidate. O’Leary previously mentioned Blue Apron as a buyout target last month.

“Having gotten close to that industry, getting involved with Plated, which was acquired by Albertsons ... I thought, I know this space,” O’Leary said on April 26. “Blue Apron can't survive on its own and it'll get acquired, and I'm thinking the acquisition price could be between $4 and $5.”

O’Leary isn’t the only Wall Street expert getting cautiously optimistic on Blue Apron. Stifel analyst Scott Devitt said Thursday that Blue Apron’s new pilot program for an on-demand product available in select Costco Wholesale Corporation COST stores could be a step in the right direction in reaching more customers and raising brand awareness.

“We are cautiously optimistic on shares of Blue Apron over the short-to-intermediate-term as we believe the operational headwinds have now subsided,” Devitt said.

Doubters Remain

Blue Apron still has plenty of doubters. Morgan Stanley reiterated its Market Perform rating for Blue Apron but lowered its price target for the stock from $4.50 to $2.00.

Stifel has a Hold rating for Blue Apron and also lowered its price target from $4.00 to $3.50.

The stock traded around $2.38 per share at time of publication, up 43. percent on the day.

Related Links:

Blue Apron Up 5% Following Q1 EPS Beat

Playmakers: The Investor Picks From CNBC's 2018 Stock Draft