Opera Limited (OPRA) is the Norway-based developer of Opera web browsers for desktop and mobile, offering Android and iOS versions. They also offer Opera Mini, which is a lightweight version of Opera Browser for slower internet connections and data suppression, and the Opera News content platform. With operations across Europe, Africa, and Asia, the Opera browser is the everyday choice of more than 350 million users.
Valued at a market cap of $1.28 billion, Opera’s stock has risen 22.6% over the past 52 weeks. On a YTD basis, the shares are up 4.3%.
OPRA Beats on Q1 Earnings
Ahead of the bell this morning, OPRA released its results for the first quarter of 2024. Adjusted EBITDA rose to $24.9 million year-over-year, while revenue increased 17.1% to $101.9 million. EPS arrived at $0.17 on a GAAP basis. Both earnings and revenue topped Wall Street's expectations.
Operating cash flow for Q1 was $31.0 million, while free cash flow from operations arrived at $8.3 million.
Looking ahead, management guided for full-year 2024 revenue of $454 million to $465 million, reflecting an increase of 16% over 2023 revenue at the midpoint. Adjusted EBITDA is expected to range between $106 million and $110 million.
Google Extends Long-Term Deal
Earlier this month, Opera announced that Alphabet’s (GOOG) Google had exercised an option to extend its commercial search agreement. The previous agreement was for three years from 2022 to 2024, with the option for Google to extend through 2025.
Opera has had search distribution agreements in place with Google since 2001.
Is OPRA Stock a Buy?
Analysts are very bullish on OPRA, with a unanimous “Strong Buy” rating among the four experts in coverage, and a mean price target of $23.00 - indicating an upside potential of 58.7% from current levels.
OPRA's adjusted forward P/E ratio of 14.98 is a steep 45% discount to the stock's 5-year average valuation, and it's also cheaper than the tech sector median. With the shares pulling back pre-market despite the earnings beat and forecast hike, investors might use this sell-the-news reaction to scoop up shares of Opera at a discount.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
