Opera Limited Stock Booms: An Analysis of Performance
Opera Limited (OPRA) has experienced a remarkable surge of 19% in the past month, which is in stark contrast to the Computer & Technology sector’s 0.3% decline and the Internet – Content sector’s 1.9% rise as per Zacks data.
Robust Q2 Results Driving Stock Price
The driving force behind Opera Limited’s stock price surge is its outstanding second-quarter 2024 earnings report. The company witnessed a 17% year-over-year revenue increase, reaching $110 million.
Positive Revenue Growth
Advertising revenue grew by 20% to $65 million, while Search revenues increased by 15% to $45 million. A notable 25% year-over-year rise in average revenue per user (ARPU) was also observed, reaching $1.46 annually.
Exploring the Growth Potential
Opera Limited’s expanding user base, fueled by a growing product portfolio, raises questions about the stock’s potential attractiveness to investors. How sustainable is this growth trajectory?
The Role of Strong Portfolio & Partnerships
In Q2 2024, Opera introduced several new products and updates, such as Opera One for iOS and the Opera GX gaming browser, which significantly expanded its user base. Notably, Opera GX gained 500,000 new users in Q2, bringing its total monthly active users to 30 million, marking a 27% increase from the previous year.
Opera’s partnerships with tech giants like Alphabet’s Google Cloud, Microsoft, and NVIDIA have further bolstered its prospects. Collaborations such as integrating Google Cloud’s Gemini models into its AI, optimizing browsers for Arm-based systems with Microsoft and Qualcomm, and enhancing AI capabilities with NVIDIA’s technology have all contributed to Opera’s enhanced user experiences and monetization efforts.
Positive Q3 Guidance
Looking ahead to the third quarter of 2024, Opera Limited expects revenues in the range of $119-$121 million, indicating a 17% year-over-year increase at the midpoint. The Zacks Consensus Estimate also suggests healthy growth projections for both revenues and earnings.
Valuation and Investment Outlook
Opera Limited’s stock is currently trading at a significant discount compared to industry averages. With a Valuation Score of A and a promising forward 12-month Price/Sales ratio, the stock presents an appealing investment opportunity. The company’s strong product portfolio, strategic partnerships, and attractive valuation make it a compelling choice for investors.
Opera Limited currently holds a Zacks Rank #2 (Buy), reflecting positive market sentiment towards the stock.