These two tech stocks sport extremely compelling valuations right now, says five-star RBC Capital analyst Mark Mahaney (Track Record & Rating). With tech sentiment shifting, is now the time to jump in for some bargain buys or is it better to steer clear? These are the questions investors are left asking following a choppy start to the third quarter. Which means now is the time to turn to expert advice to reveal which stocks are the most promising right now. And when it comes to experts, one of the best out there is RBC’s Mark Mahaney. TipRanks reveals that this analyst ranks an impressive #26 out of almost 5,000 Wall Street analysts for his savvy stock picking ability.

Luckily for us, we can now see which stocks Mahaney is particularly bullish on right now thanks to a just-released report. He highlights the following two stocks as two of his top stock picks in the internet world- and reveals how far he thinks these stocks can climb in the coming months. Let’s take a closer look at how these stocks measure up now:

Expedia- Up 2% YTD

Ahead of Q3 earnings, Mahaney singles out leading online travel company Expedia (EXPE – Research Report) as the stock to watch. “We’re most incrementally near -term constructive on EXPE — which has traded down 8% intra-quarter, but we believe has a reasonable shot at upwards estimates revisions on the print, based on healthy macro lodging trends and reasonable Street estimates” cheers Mahaney.

And aside from strong earnings potential, EXPE also looks attractive from a broader perspective. The analyst sees stock prices rising 22% to $150. “We continue to believe Expedia remains an excellent play on the secular growth in Online Travel” states Mahaney.

Most notably, he sees a tremendous growth runway for vacation rental marketplace HomeAway- Expedia’s answer to AirBnB. “With only approx. one-third of HomeAway properties Instantly Bookable, we believe it is still early days for this asset” he continues.

Meanwhile, EXPE is more aggressively investing in Tech and Marketing to scale its global footprint and catch up to industry leader Booking Holdings (BKNG), which currently has approx. 2X the inventory and Room Nights Sold as EXPE.

Overall, Expedia scores a cautiously optimistic Moderate Buy rating from the Street. In the last three months, 14 analysts have published buy ratings vs 5 hold ratings. Notably, the price target indicates compelling upside potential of over 26%.

And clicking on the stock ticker we can see that the highest- and most recent- price target comes from SunTrust’s Naved Khan (Track Record & Rating). This top analyst sees shares up 47% to $180 as “EXPE is in the very early stages of realizing significant operational benefits from cloud migration, including improved marketing efficiency, faster product innovation, and greater personalization.”

View EXPE Price Target & Analyst Ratings Detail

Facebook – Down 11% YTD

Don’t unfriend Facebook (FB – Research Report) yet. Despite all the recent controversies, the fact remains that FB stills owns two of the largest media assets in the world (Facebook & Insta) plus the two largest messaging assets in the world (Messenger & WhatsApp). And this comes with a 35% Ad Revenue growth on a $55B run rate.

“Monetization of core FB & Instagram assets still has material upside potential and Messenger & WhatsApp remain unmonetized,” says Mahaney. According to the RBC analyst, we are looking at the Number 1 Large-Cap Long in internet stocks right now. The market is discounting the current aggressive investment cycle, but not factoring in potential product development.

“On valuation, FB currently trades @ 19X P/E (~17X excl. cash) — inexpensive in our view for what should be a 25%+ estimated long-term EPS CAGR. $160 is the new $20…” he explains. Think about this: FB is one of a handful of ‘Net stocks now trading within 10% of its 52-week lows; and 20% below its average forward EV/EBITDA multiples.

Plus the stock is also one of the most attractive on a growth-adjusted basis. On a 2019E EV/EBITDA / 2018 – 19 growth basis, FB trades at just 0.59x, while Netflix is at 1.21x.

Indeed, from current levels, Mahaney sees shares spiking 40% to hit his $225 price target. Not that he’s alone in his bullish take on the stock’s prospects: according to the Street, current headwinds remain transitory.

As we can see below, Facebook is still a ‘Strong Buy’ stock. Out of 38 recent ratings on the stock, 31 are bullish on the social giant’s prospects. Turning to the average analyst price target, we can see that the upside potential may be more conservative than Mahaney’s estimates, but it still brushes past the 30% mark.

View FB Price Target & Analyst Ratings Detail