Snap Inc.'s (SNAP) - Get Report stock may have been battered since its high-profile IPO, but there's some reason to think it might rebound.

Shares of the Snapchat parent company have already enjoyed a recent reprieve. Snap on Wednesday had its best trading day since its March 2 IPO, rising close to 11.5% $15.98. While the stock currently trades at a 43% discount to its intraday high of $29.44 on March 3, there's no denying that it has turned sharply higher in the last few months. Shares of Snap are up about 40% after from their low of $11.28 on Aug. 14.

But what's behind Snap's recent pop? And on top of that, are the gains sustainable?

Some of it might be tied to the launch of Snap's latest product, Context Cards. Context Cards allow users find out more about a friend's Snap by swiping up to view things such as restaurant reviews, contact information and directions. They also have the ability to make reservations. Snap partnered with companies including TripAdvisor (TRIP) - Get Report OpenTable, Uber, Lyft and FourSquare to build out a suite of services, and said it will be adding more partners soon.

Context Cards represent one of the biggest changes to Snap's interface since the company introduced Snap Maps, its interactive map product, a few months ago. And while it's easy to overlook Context Cards and Snap Maps as bullet points in a larger list of features on Snapchat, they may end up being very valuable tools in the social media company's ongoing battle with Facebook Inc. (FB) - Get Report .

Facebook has been able to steal Snap's thunder by copycatting some of its most important products, notably its Stories feature, and that has served as a major impetus behind the stock's decline. Snap now seems like it's building a set of features that are more difficult for Facebook to copy. The recent reversal in Snap's stock could indicate that investors are taking note of this strategy and like what they see.

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"I would guess that the Context Cards could be what's driving the optimism that we have seen in the stock, as they do represent another user monetization opportunity," said Morningstar analyst Ali Mogharabi. "Whether it will be successful or not remains to be seen, as the big competitors, mainly Facebook, are still out there; which brings up questions like: does Snap have any competitive advantages, and if so, are they sustainable for the long term?"

Mogharabi doesn't think so, but others are more optimistic. In a rare bullish note recently, Credit Suisse analyst Stephen Ju said he thinks advertisers are starting to warm up to Snapchat, after it hit some speed bumps with the roll-out of its new self-service ad platform, Snap Publisher. The platform makes it easier for brands to tailor their ad campaigns to Snapchat's vertical video format -- an issue that had become a big problem prior to the introduction of Snap Publisher, the company recently said.

Ju is so confident that he raised Snap's stock price target to $20 from $17, implying that there's room for almost 20% upside in the stock.

More advertisers are beginning to view Snap less as an experiment and more as a staple of their ad budget, Ju contends. With the introduction of features such as Context Cards, there's now more places to include ads on Snapchat, and it's likely only a matter of time before Snap announces new opportunities for brands to advertise there. This could spur additional average revenue per user (ARPU) growth and user engagement.

Investors also seem to be catching on to the fact that Snap's real value proposition lies not in its ability to match Facebook's sprawling user base. Instead, Snap needs to show that it can squeeze as many dollars out of its users as it can.

"My observation is that a lot of the street is focused on things like users and user growth," said Pivotal Research analyst Brian Wieser. "It's not even worth measuring this valuation toward this implausible goal and yet people continue to model it that way."

Bottom line, it's unrealistic to expect that Snap will catch up with the behemoth that is Facebook. As expectations continue to temper, it should be easier for Snap to either match or slightly exceed estimates, which, in turn, could generate further upside in the stock.

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