BARK (NYSE:BARK) shares rose more than 7% pre-market today after Jefferies upgraded the company to Buy from Hold and raised its price target from $1.54 to $1.90. The upgrade comes as the firm anticipates a promising outlook for the company heading into fiscal 2025.

According to Jefferies, BARK is positioned well for the future, with expectations of improved visibility in revenue, profits, and margins. The firm highlighted 2025 as a pivotal year for BARK's growth trajectory, driven by its expansion into treats, which is expected to reach over 2,400 locations in spring 2024 with potential for further expansion. Additionally, increased marketing investments and enhanced capabilities in customer acquisition are projected to contribute to a growth rate of 4-5% in 2025.

Jefferies also pointed out that the company's improved revenue trajectory and cost management are expected to clear a path towards profitability, forecasting BARK to achieve full-year adjusted EBITDA and EPS profitability by 2025 and 2026, respectively, underscoring an attractive risk-reward profile for the stock.