Facebook Inc (NASDAQ:FB) and Yelp Inc (NYSE:YELP) reported third-quarter financial earnings last week, and JMP analyst Ronald Josey commends the two internet players for robust outcomes. The analyst believes Facebook has a “positive risk/reward” factor, despite management commentary that initially sent investors reeling despite strong results. Meanwhile, though Yelp also performed well this quarter, Josey highlights various concerns and uncertainties that keep him reporting from the sidelines.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, three-star analyst Ronald Josey is ranked #1,770 out of 4,162 analysts. Josey has a 52% success rate and gains 0.6% in his annual returns. When recommending FB, Josey realizes 23.4% in average profits on the stock. However, when suggesting YELP, Josey loses 47.2%.

Let’s dive in:

Facebook Inc

After Facebook posted its third-quarter print on November 2nd, Josey found himself impressed by the results, commending the social media giant’s expansion of its engagement ratio in daily active users as well as monthly active users, with advertising revenue seeing a 59% year-over-year growth coupled with rising EBITDA margins.

In reaction, the analyst reiterates an Outperform rating on shares of FB with a $165 price target, which represents a 34% increase from current levels.

Of course, worthy of note is management commentary that caused FB shares to take an initial dip. Investors found themselves apprehensive after hearing 2017 will be an investment-focused year. Additionally, the corporate team warned of waning ad load growth in the back half of the year, slated to hit ad revenue growth.

Yet, Josey explains, “We already took into account the expected change in ad load growth in our projections, and based on our view that Facebook’s multiple opportunities across its 10+ year strategic plan likely require significant investment, we believe increasing investments is the right thing to do. As a result, we would take advantage of any dislocation in shares, acknowledging FB may trade sideways until the company provides additional details around its 2017 expense guidance, which is most likely during 4Q16 earnings.”

Therefore, “Facebook remains our top pick across the Internet sector, with multiple catalysts in the near term around new ad products, Instagram, and video, and longer-term around Messenger, WhatsApp, and Oculus,” Josey concludes.

For the financial year of 2016, the analyst projects revenue to reach a 54% year-over-year increase to $27.5 billion and a 59% year-over-year EBITDA surge to $17.8 billion. Meanwhile, Josey anticipates PF EPS will elevate from $3.96 to $4.18. For the financial year of 2018, the analyst forecasts enterprise value (EV) for FB of $44.1 billion and EBITDA of $29.1 billion.

TipRanks analytics exhibit FB as a Strong Buy. Out of 36 analysts polled by TipRanks, 34 are bullish on Facebook stock, while 2 remain sidelined. With a return potential of nearly 32%, the stock’s consensus target price stands at $159.00.screen-shot-11-07-16-at-03-45-pm

Yelp Inc

Yelp released third-quarter earnings on November 2nd that outclassed expectation. Though Josey notes he is “incrementally positive” on shares following the print and sings the praises of the customer review platform’s reprioritization of “its most promising areas,” he nonetheless reiterates a Market Perform rating on YELP without listing a price target.

The analyst notes, “Yelp continues to make progress on its 2016 goals and our main takeaway from the quarter is that newer businesses like self-service and ‘request a quote’ (RaQ) are reaching a size and scale such that they could be significant drivers of growth and margins going forward.”

YELP is in the process of reallocating $15 to $20 million in savings. Upon closing its international sales as well as marketing organization, the platform will opt to channel the funds into its domestic segment, choosing to target engagement and the above-stated “newer initiatives.” Combined with a new performance marketing-infused approach to the company’s ad campaigns, the company is on track with its refocusing plans, “all of which we believe is the right direction,” Josey adds.

The analyst asserts, “However, engagement growth continues to decelerate with mobile traffic decelerating to single-digit growth while app unique device growth is also decelerating,” leading to his decision to maintain caution on the stock.

Ultimately, “We believe shares are fairly valued at current levels given the uncertainties around overall traffic and the investments needed to reaccelerate usage,” Josey contends.

TipRanks analytics demonstrate YELP as a Buy. Based on 26 analysts polled in the last 3 months, 14 rate a Buy on YELP, 9 maintain a Hold, while 3 issue a Sell. The 12-month price target stands at $40.16, marking an 11% upside from where the stock is currently trading.screen-shot-11-07-16-at-03-46-pm