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Opera Ltd (OPRA)
NASDAQ:OPRA

Opera (OPRA) AI Stock Analysis

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OP

Opera

(NASDAQ:OPRA)

Rating:81Outperform
Price Target:
$23.50
▲(17.62%Upside)
Opera's overall stock score is driven by its strong financial performance and positive earnings call outcomes. Technical analysis supports a bullish view, although the stock's valuation appears high. The company’s ability to innovate and grow in key areas like advertising and e-commerce, coupled with strong cash flow, supports a positive outlook.
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 focus on higher-value users in developed markets positions it for sustained, profitable growth.
Negative Factors
Market Competition
Opera's unique position as a browser, growth in higher ARPU user segments and Western Markets, and ramping of new 1P and 3P ad products are key strengths, but face strong competition in focus verticals.
Regulatory Concerns
Multiple catalysts are anticipated, including the resolution of Google regulatory matters, scaling of iOS app presence, and Search agreement renewal.

Opera (OPRA) vs. SPDR S&P 500 ETF (SPY)

Opera Business Overview & Revenue Model

Company DescriptionOpera Limited (NASDAQ: OPRA) is a global internet company that develops and operates web browsers and related services. Known for its flagship Opera browser, the company focuses on providing fast, secure, and innovative browsing experiences across multiple platforms including Windows, macOS, Linux, Android, and iOS. Opera's offerings also extend to an integrated AI-powered newsreader, as well as fintech solutions through its subsidiary, OPay.
How the Company Makes MoneyOpera makes money primarily through partnerships and licensing agreements with search engines, which pay Opera for directing user queries through their search services. Additionally, the company generates revenue through advertising within its browser and news applications, as well as through premium services and features available to users. Opera's fintech solutions, particularly in emerging markets, also serve as a growing source of income, leveraging digital payment services and other financial products.

Opera Earnings Call Summary

Earnings Call Date:Apr 28, 2025
(Q1-2025)
|
% Change Since: 28.65%|
Next Earnings Date:Aug 21, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong start to 2025 with record revenue growth, significant advertising and e-commerce performance, and innovative product launches. However, there were some concerns regarding the slowdown in search revenue growth, stable yet declining MAU numbers, and a slight decrease in GX ARPU.
Q1-2025 Updates
Positive Updates
Record Revenue Growth
Year-over-year revenue growth increased from 29% in Q4 2024 to 40% in Q1 2025, surpassing the previously guided range of 28% to 31%. This resulted in a record first-quarter revenue of $143 million.
Advertising Revenue Surge
Advertising revenue grew 3% in Q1, reaching $96 million and now represents two-thirds of total revenue. E-commerce was the fastest-growing vertical with over 100% annualized growth.
Strong EBITDA and Profitability
Adjusted EBITDA was $32 million, exceeding the high end of previously issued guidance, with a corresponding margin of 23%.
Innovative Product Launches
Opera became the first major browser to present AI agentic browsing through the browser operator, showcasing its ability to perform tasks like travel bookings and online purchases. Opera Air was also launched, targeting users in Western markets.
Significant ARPU Increase
Annualized ARPU grew 44% year-over-year, reflecting successful monetization strategies.
Negative Updates
Search Revenue Growth Slowdown
Search revenue grew 8% year-over-year, which is a slowdown compared to previous growth in the teens.
Stable but Declining MAUs
The user base remained stable at 293 million MAUs, but there is a slight downward trend indicating potential challenges in user acquisition or retention.
GX ARPU Decline
Opera GX's annualized ARPU was $3.41, slightly down from the seasonal peak of Q4.
Company Guidance
During the Opera Limited First Quarter 2025 Earnings Call, the company reported impressive financial results that exceeded expectations. The company achieved a 40% year-over-year revenue growth, surpassing its previous guidance range of 28% to 31%. This translated to a record revenue of $143 million for the first quarter. Advertising revenue, which grew by 3% and reached $96 million, accounted for two-thirds of total revenue, with e-commerce being the fastest-growing vertical at over 100% annualized growth. Search revenue also saw an 8% increase to $47 million. Adjusted EBITDA was reported at $32 million, with a margin of 23%, highlighting the company’s ability to accelerate top-line growth without sacrificing profitability. The user base remained stable at 293 million monthly active users (MAUs), and annualized ARPU grew by 44% year-over-year. Opera also highlighted the successful product launches and updates, including AI implementations in its browsers. Looking ahead, Opera raised its full-year revenue guidance to $567 million to $582 million, reflecting a 20% annual growth at the midpoint, and adjusted EBITDA guidance to $135 million to $140 million. The company expects continued growth in both advertising and e-commerce, despite potential macroeconomic challenges.

Opera Financial Statement Overview

Summary
Opera demonstrates strong financial performance with robust revenue and profit growth. The income statement shows significant revenue growth and improved net profit margins. The balance sheet indicates low leverage risk with a strong equity ratio, and cash flows are healthy with effective profit-to-cash conversion. Overall, Opera is on a solid financial trajectory, though maintaining growth while managing risks is crucial.
Income Statement
85
Very Positive
Opera's income statement shows strong revenue growth with a TTM (Trailing-Twelve-Months) revenue of $522.4 million, reflecting a significant growth from the previous year. The gross profit margin is high, indicating efficient cost management relative to revenues. Net profit margin has improved, showcasing increased profitability. EBIT and EBITDA margins are healthy, suggesting robust operational performance.
Balance Sheet
78
Positive
Opera's balance sheet demonstrates solid financial health with a low debt-to-equity ratio, indicating low leverage risk. The equity ratio is strong, reflecting a stable capitalization structure. Return on equity is improving, highlighting effective use of equity to generate profits. The balance sheet stability supports long-term financial sustainability.
Cash Flow
80
Positive
Opera's cash flow statement reveals a positive free cash flow with growth over the prior period, indicating good cash generation capabilities. The operating cash flow to net income ratio is strong, supporting the quality of earnings. Free cash flow to net income ratio also indicates effective conversion of profits into cash, which is vital for reinvestment and shareholder returns.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue522.43M480.65M396.75M331.04M250.99M165.27M
Gross Profit265.69M268.43M207.40M276.45M237.30M153.16M
EBITDA110.97M107.96M173.98M39.68M10.05M56.50M
Net Income84.31M80.77M153.30M15.04M-14.97M34.31M
Balance Sheet
Total Assets1.04B1.06B1.01B964.69M1.12B1.11B
Cash, Cash Equivalents and Short-Term Investments103.55M126.80M93.86M118.66M181.01M135.02M
Total Debt9.55M9.59M10.55M7.83M13.51M8.97M
Total Liabilities113.52M115.48M91.09M76.47M80.17M60.95M
Stockholders Equity929.53M940.10M919.85M888.21M1.04B1.05B
Cash Flow
Free Cash Flow83.57M81.63M76.36M46.69M20.67M82.00M
Operating Cash Flow90.77M104.98M82.76M56.66M26.56M93.32M
Investing Cash Flow-10.66M-27.11M20.00M44.45M-49.70M2.96M
Financing Cash Flow-67.46M-42.15M-59.84M-150.58M-6.68M-100.97M

Opera Technical Analysis

Technical Analysis Sentiment
Positive
Last Price19.98
Price Trends
50DMA
18.02
Positive
100DMA
17.74
Positive
200DMA
17.56
Positive
Market Momentum
MACD
0.45
Negative
RSI
64.78
Neutral
STOCH
84.64
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OPRA, the sentiment is Positive. The current price of 19.98 is above the 20-day moving average (MA) of 18.78, above the 50-day MA of 18.02, and above the 200-day MA of 17.56, indicating a bullish trend. The MACD of 0.45 indicates Negative momentum. The RSI at 64.78 is Neutral, neither overbought nor oversold. The STOCH value of 84.64 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$1.79B27.119.18%3.90%26.71%-23.67%
74
Outperform
$1.20B96.851.35%16.62%
WBWB
73
Outperform
$2.32B7.0610.79%8.63%0.83%22.06%
69
Neutral
$803.30M16.045.05%-16.79%
61
Neutral
$41.24B-0.79-14.21%3.80%2.39%-73.52%
IAIAC
60
Neutral
$3.10B-15.07%-18.11%-516.37%
53
Neutral
$252.72M-14.61%4.15%-394.93%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OPRA
Opera
19.98
7.09
55.00%
ANGI
Angi
16.74
-1.96
-10.48%
WB
Weibo
9.55
2.30
31.72%
IAC
IAC/InteractiveCorp.
38.81
0.36
0.94%
TBLA
Taboola.com
3.69
0.39
11.82%
TEAD
Teads Holding
2.68
-2.13
-44.28%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 02, 2025