Top ranked analyst Stephen Ju of Credit Suisse provides his insights on Facebook Inc (NASDAQ:FB) and, Inc. (NASDAQ:AMZN) prior to Q1 earnings releases from both.  The analyst is bullish on both companies due to favorable quarterly checks and strong metrics related to the balance sheet, respectively. Stephen Ju is ranked #74 out of 3,893 analysts on TipRanks. He has a 67% success rate recommending stocks with an average return of 15.2% per recommendation.Stephen Ju Stats

Facebook Inc

Facebook is set to release earnings on April 27 after market close. The analyst points to various positive takeaways from near-term quarterly checks. First, Ju provides hopeful sentiment on the “pricing strength” of Instagram and Video ads on Facebook’s newsfeed in spite of slight declines from “a seasonably strong 4Q.” Most notably, the analyst predicts “two more Facebooks lurking inside Facebook” longer term due to the shift from Messenger’s “chat feed” to a news feed which will “lead the way to native adverting” over time. The analyst believes that the short term “monetization of Messenger” as well as the longer-term monetization of WhatsApp represents a catalyst for the stock.

Ju then describes his bullish stance on Facebook. First, he predicts “long term revenue growth” resulting from Instagram, Premium video, and DPA, noting the company does not have to heavily rely on “a material lift in ad loads.” Second, the analyst believes consensus estimates do not give the company enough credit regarding the “long-term monetization potential of upcoming new products.” Finally, the analyst notes that his current estimates for the company are conservative, as they do not include “contributions” from WhatsApp, Messenger, and Offers/Local.

According to TipRanks, out of all the analysts who have rated the stock in the past 3 months, 90% gave a Buy rating, 2% gave a Sell rating, and 7% remain on the sidelines. The average 12-month price target for the stock is $135.62, marking a 23% upside from where shares last closed., Inc.

Ju also comments on Amazon prior to its 1Q:16 earnings on April 28 after market close. The analyst maintains an Outperform rating and $800 price target on the company for three reasons. First he notes a DCF valuation of $147 billion for the company, higher than consensus pricing. Second, he predicts higher FCF due to easing “capital intensity to run AWS” and usage growth. Third, he notes more efficient shipping management which leads to better operating margins.

The analyst explains further, “Heading into this quarter’s report, we highlight the acceleration in the year over year growth in Amazon’s Unearned Revenue disclosure on its balance sheet. This tracks the outstanding liabilities Amazon is yet to deliver for Prime subscribers on the $99 annual fee. Following the price-hike driven acceleration in 1Q14 which were comped by 1Q15, Amazon has continued to exhibit growth acceleration in this metric starting 3Q15 due to Prime Day and displayed further incremental acceleration in 4Q15. Some of this can be due to AWS Reserved Instances, but we believe this is pointing the way toward Prime subscriber growth acceleration and augurs good things to come for Amazon’s GMV/e-commerce revenue.”

According to TipRanks, out of all the analysts who have rated the company in the past 3 months, 89% gave a Buy rating while 11% remain on the sidelines. The average 12-month price target for the stock is $750.06, marking an 18% upside from current levels.