Snap has fallen enough for a Wall Street firm to almost recommend the stock

Snap popped. Then it sank, and much of Snapchat's parent's IPO excitement began to fade.

Now, though, the outlook might be a little better, one Wall Street research group believes.

On Tuesday New York-based CFRA Research upgraded its rating on the stock to hold from sell, citing the fact that shares have now fallen below the firm's 12-month price target of $22.

Analyst Scott Kessler wrote in a note to clients that he still sees a number of issues with Snap, including "substantial competition," most notably from Facebook and its photo-sharing app Instagram.

The lack of corporate governance is another concern for the company, Kessler said, with Snap's early founders holding 89 percent of voting control.

Nonetheless, CFRA Research said it expects "considerable growth" as Snap prioritizes its efforts around making money, and analyst Kessler wrote that sentiment around the company post-IPO has been "perhaps excessively negative."

Shares of Snap closed their first day of trading up more than 40 percent and peaked at a high near $30. On Tuesday shares closed only slightly above $20, down more than 2 percent for the day.

Watch: How to make your money back in Snap