Opera Limited has a small market share in web browsers but is focusing on high-value segments for growth. Opera's gaming browser, Opera GX, has driven higher ARPU and user growth, contributing to increased operating income. Analysts have a Strong Buy rating on Opera, with potential for significant growth if current trends continue.
Opera Limited stock has seen a 6.74% total return since my last recommendation, slightly below the S&P 500. I think the stock's current dip is a buying opportunity. As I see it, Opera's unit economics and fundamentals remain solid, with multiple prospects going forward. Opera's strong cash flow generation, growing user base, and strategic investments position the company for continued growth and potential expansion in sales.
OPRA continues to demonstrate excellent monetization across its gaming platform, advertising, and search engine segments, along with growing market shares. This is on top of the improved edge multi-modal AI capabilities, allowing users to keep data locally while browsing/ working "privately and securely." OPRA's strategy of focusing on higher ARPU regions since FQ2'21 have been extremely successful as well, as observed in the expansion in its adj EBITDA margins.
Investors were hoping Opera and Apple could collaborate. Apple made no mention of Opera at its event today.
Opera announced a partnership with Google. Specifically, Opera's multi-LLM browser will now host Google's Gemini.
The consensus price target hints at a 65.2% upside potential for Opera Limited (OPRA). While empirical research shows that this sought-after metric is hardly effective, an upward trend in earnings estimate revisions could mean that the stock will witness an upside in the near term.
Opera investors have suffered a recent bear market, but the pain could have peaked. Opera has continued to grow its higher-value user base robustly, benefiting its monetization opportunities. The recent Digital Markets Act in the EU could open up more opportunities for Opera to expand further in iOS.
Opera Limited is a smaller technology company developing a better web browser for the world, especially gamers, with 300+ million active users. The European Union's promotion of competition in the browser space is boosting Opera's long-term outlook and driving strong business growth. OPRA's low valuation, high-growth rate, and extraordinary 6% dividend yield make it an appealing investment option.
Opera stock pulled back substantially in the past few months, but the bigger picture appears to be bright. Opera's investments in AI infrastructure to make its browsers more capable could turn out to be a smart move.
Investors need to pay close attention to Opera (OPRA) stock based on the movements in the options market lately.