Snap's lockup woes 'should now be behind the company' (SNAP)

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One of investors' biggest worries about Snap is no longer an issue, according to Cantor Fitzgerald.

"Snap’s lock-up expiration began on 7/29 and consisted of 400M shares on that date, 782M shares on 8/14, and 20M shares on 8/29 (per S3). Thus, much of the negative impact should now be behind the company," Kip Paulson, an analyst at Cantor Fitzgerald, wrote in a note to clients.

Shares of Snap are trading 1.43% higher on Tuesday, the second day in a row of positive trading for the social media company.

Monday was the latest expiration of a lockup period for Snap. The lockups were put in place during the company's initial public offering as a way to stop company insiders from selling immediately after Snap went public. Investors were worried that the insiders would just wait until the lockup expired to sell their shares, flooding the market with nearly 1.2 billion new shares over the course of a month.

With a promise from CEO Evan Spiegel and CTO Bobby Murphy to hold on to their shares this year, and the number of expiration dates left waning, it looks like the company is finally out from under the pressure of the lockups, according to Paulson.

Paulson summed up his thinking on Snap's turnaround.

"Although daily active users trends were disappointing in Snap’s first two quarters and the transition toward self-serve ad sales is an near-term headwind on average revenue per user growth, it’s important to note that engagement is growing, daily active user estimates appear to be more achievable, and there could be significant upside to average revenue per user in 2018 and beyond."

Cantor Fitzgerald raised its rating of Snap to overweight, but left its $15 price target intact. The target is 16.7% higher than Snap's current price.

Investors are also worried about strong competition from Snap's competitors, but Paulson says the strong engagement and time spent on Snapchat offsets the company's disappointing user growth numbers.

Snap has slid 24.4% since the company's IPO in March.