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Opera Ltd (OPRA)
NASDAQ:OPRA
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Opera
(NASDAQ:OPRA)
76Outperform
Positive Factors
Financial Performance
With no debt, rising free cash flow, and a disciplined capital return strategy, accelerating shareholder returns are expected.
Revenue Growth
Opera guided for continued 29% revenue growth in Q1, reinforcing confidence in sustained momentum into 2025.
User Engagement
Opera's AI-driven enhancements and iOS expansion strengthens engagement and monetization, supporting multi-year growth.
Negative Factors
Currency Impact
Currency headwinds impacted growth, reducing what could have been a higher revenue increase.
Market Competition
The Digital Ad backdrop is strong and Opera is gaining share in focus verticals.
Opera (OPRA) vs. S&P 500 (SPY)
Market Cap
$2.86B
Dividend Yield4.82%
Average Volume (3M)487.11K
Price to Earnings (P/E)17.8
Beta (1Y)1.24
Revenue Growth20.42%
EPS Growth-53.10%
CountryUS
Employees592
SectorCommunication Services
Sector Strength76
IndustryInternet Content & Information
Share Statistics
EPS (TTM)0.91
Shares Outstanding88,480,156
10 Day Avg. Volume385,198
30 Day Avg. Volume487,114
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)N/A
Price to Sales (P/S)3.92
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$26.40Price Target Upside63.16% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Opera Business Overview & Revenue Model
Company DescriptionOpera Limited, together with its subsidiaries, provides mobile and PC web browsers. It operates in two segments, Browser and News, and Other. The company offers mobile browser products, such as Opera Mini, Opera for Android and iOS, Opera GX Mobile, and Opera Touch; PC browsers, including Opera for Computers and Opera GX; and Opera News, an AI-powered personalized news discovery and aggregation service. It also provides browser-based cashback rewards under the Dify brand name; owns GameMaker Studio, a 2D gaming development platform; and GXC, a gaming portal. In addition, the company operates online marketing platforms, including Opera Ads, an online advertising platform; and Opera Ads Manager, designs to create, manage, and report on digital advertising campaigns in one place allowing advertisers to reach customers. It operates in Ireland, Singapore, Russia, and internationally. The company was founded in 1995 and is headquartered in Oslo, Norway. Opera Limited is a subsidiary of Kunlun Tech Limited.
How the Company Makes MoneyOpera generates revenue through a combination of advertising, licensing, and partnerships. A significant portion of its income comes from search and advertising partnerships with major search engines like Google and Yandex, where Opera earns money based on the traffic it directs to these platforms. Additionally, Opera monetizes its user base by displaying ads within its browser and through its Opera News app. The company also earns licensing fees from its technology solutions, which are used by third-party companies. Furthermore, Opera's strategic investments and acquisitions in fintech and gaming sectors contribute to diversifying its revenue streams.
Opera Financial Statement Overview
Summary
Opera demonstrates robust financial performance with consistent revenue and profit growth, sound profitability margins, and a stable balance sheet with minimal leverage. While the financial health is strong, maintaining gross margins and enhancing asset productivity are essential for continued growth.Income Statement
Opera demonstrates robust financial performance with consistent revenue growth, highlighted by a strong TTM revenue of $448.55M, representing a 13.05% increase compared to the previous year. The company maintains impressive profitability metrics, with a gross profit margin of 53.00% and a net profit margin of 35.57% in TTM. EBIT and EBITDA margins also remained healthy at 18.54% and 45.98%, respectively, indicating efficient operational management. However, the reduction in gross profit margin compared to previous periods suggests potential cost pressures that must be monitored.87
Very Positive
Balance Sheet
Opera's balance sheet is stable with a low debt-to-equity ratio of 0.01, underscoring conservative financial leverage. The equity ratio stands high at 90.02%, reflecting a solid equity base. The return on equity is impressive at 17.50% for the TTM, suggesting effective utilization of shareholder funds. Nonetheless, total assets growth has been modest, which could limit future expansion unless asset productivity is enhanced.82
Very Positive
Cash Flow
Opera's cash flow position is strong, with an operating cash flow to net income ratio of 0.70 and a free cash flow to net income ratio of 0.53, indicating good cash generation capability relative to earnings. The free cash flow growth rate also showed an 11.07% increase in the TTM. However, a reduction in investing cash flow suggests potential constraints on future investment opportunities, requiring strategic allocation of available resources.79
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 448.55M | 396.75M | 331.04M | 250.99M | 165.27M | 334.86M | Gross Profit |
| 237.79M | 207.40M | 276.45M | 237.30M | 153.16M | 260.86M | EBIT |
| 83.17M | 62.97M | 66.76M | -1.80M | 22.53M | 120.15M | EBITDA |
| 206.28M | 173.98M | 39.68M | 10.05M | 56.50M | 62.89M | Net Income Common Stockholders |
| 159.53M | 153.30M | 15.04M | -14.97M | 34.31M | 57.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 93.87M | 93.86M | 118.66M | 181.01M | 135.02M | 183.17M | Total Assets |
| 1.01B | 1.01B | 964.69M | 1.12B | 1.11B | 1.06B | Total Debt |
| 10.55M | 10.55M | 7.83M | 13.51M | 8.97M | 56.97M | Net Debt |
| -83.32M | -83.32M | -44.58M | -89.37M | -125.19M | -82.51M | Total Liabilities |
| 91.10M | 91.09M | 76.47M | 80.17M | 60.95M | 148.41M | Stockholders Equity |
| 919.88M | 919.85M | 888.21M | 1.04B | 1.05B | 912.21M |
| Cash Flow | Free Cash Flow | ||||
| 84.81M | 76.36M | 46.69M | 20.67M | 82.00M | -54.35M | Operating Cash Flow |
| 111.00M | 82.76M | 56.66M | 26.56M | 93.32M | -41.31M | Investing Cash Flow |
| -28.97M | 20.00M | 44.45M | -49.70M | 2.96M | -108.83M | Financing Cash Flow |
| -54.79M | -59.84M | -150.58M | -6.68M | -100.97M | 111.90M |
Opera Technical Analysis
Negative
16.18
Price Trends
18.59
Negative
18.57
Negative
16.16
Positive
Market Momentum
-0.39
Positive
35.81
Neutral
11.84
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OPRA, the sentiment is Negative. The current price of 16.18 is below the 20-day moving average (MA) of 17.61, below the 50-day MA of 18.59, and above the 200-day MA of 16.16, indicating a neutral trend. The MACD of -0.39 indicates Positive momentum. The RSI at 35.81 is Neutral, neither overbought nor oversold. The STOCH value of 11.84 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OPRA.
Opera Risk Analysis
Opera disclosed 61 risk factors in its most recent earnings report. Opera reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Opera Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.82T | 30.51 | 34.29% | 0.83% | 15.04% | 12.38% | |
79 Outperform | $15.21B | 26.25 | 19.51% | ― | 3.02% | 31.36% | |
78 Outperform | $1.89T | 19.19 | 32.91% | 0.39% | 13.89% | 38.99% | |
76 Outperform | $2.86B | 17.79 | 8.64% | 4.82% | 20.42% | -53.10% | |
74 Outperform | $242.12B | 26.67 | 20.02% | 2.63% | -5.34% | -30.57% | |
67 Neutral | $12.04B | 24.53 | 10.66% | ― | 4.70% | -7.33% | |
59 Neutral | $27.96B | 0.79 | -25.77% | 4.12% | 2.19% | -45.44% |
* Communication Services Sector Average
Performance Comparison
OPRA
Opera
16.18
1.51
10.29%
AKAM
Akamai
80.05
-29.28
-26.78%
CSCO
Cisco Systems
60.86
12.35
25.46%
FFIV
F5 Networks
263.88
74.04
39.00%
GOOGL
Alphabet Class A
154.33
-0.42
-0.27%
MSFT
Microsoft
378.80
-42.55
-10.10%
Opera Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -11.87% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong positive sentiment, with significant revenue and user growth in high-ARPU regions, driven by successful product innovations and advertising revenue growth. Despite the increase in costs and marketing spend, the company achieved impressive financial performance, surpassing guidance and setting a positive outlook for 2025.Highlights
Strong Revenue Growth
Year-over-year revenue growth accelerated from 17% in the first half of 2024 to 29% in Q4, beating the guidance by 800 basis points.
Advertising Revenue Surge
Advertising revenue was $93 million in Q4, growing 38% year-over-year, driven by e-commerce opportunities within Opera Ads.
User Growth in High-ARPU Regions
Users in Western markets grew by 3.5 million, with North America and Europe now representing almost 19% of the user base, up from 16% a year ago.
High ARPU Growth
Annualized ARPU grew 33% year-over-year to $1.98, marking the highest ARPU growth in two years.
Product Innovations
New versions of Opera GX and Opera One were released, featuring AI capabilities and revamped designs, contributing to user growth.
Opera GX User Growth
User base of Opera GX grew to 33.9 million MAUs, up 22% year-over-year.
Positive EBITDA Performance
Adjusted EBITDA came in above the high end of the guidance range, at $33 million or a 23% margin.
Lowlights
Cost of Revenue Increase
Cost of revenue items came in at $48 million or 33% of revenue, scaling with revenue overperformance, which presents a margin percentage headwind.
High Marketing Spend
Marketing spend increased to $41 million in Q4, driven by new product releases.
Company Guidance
During the Opera Limited Fourth Quarter 2024 earnings call, the company reported significant achievements and provided optimistic guidance for the future. Opera's revenue growth accelerated to 29% year-over-year in Q4, a notable increase from the 21% guidance, driven primarily by a 38% rise in advertising revenue. Search revenue also grew by 17% year-over-year. The adjusted EBITDA exceeded expectations at $33 million, representing a 23% margin. The company noted impressive user growth in high-ARPU regions, with North America and Europe now comprising almost 19% of the user base, up from 16% the previous year. Opera's annualized ARPU increased by 33% to $1.98, marking the highest growth in two years. The company guided for continued revenue growth into Q1 2025, expecting a 29% year-over-year increase with adjusted EBITDA projected between $28 million to $30 million. For the full year 2025, Opera anticipates revenue between $555 million and $570 million, with an adjusted EBITDA margin of 24%. The company also highlighted upcoming product innovations, particularly in AI, as key growth drivers moving forward.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.