Opera Limited OPRA shares have gained 16.1% in the year-to-date (YTD) period underperforming the Zacks Computer & Technology sector’s rise of 25.4% but outperforming the Zacks Internet - Content sector’s rise of 6.1%.
Opera Limited is benefiting from continued momentum in user adoption and broader monetization efforts, particularly in its advertising and search revenues.
In the second quarter of 2024, Advertising revenues grew 20% year over year to reach $65 million, while Search revenues witnessed a 15% increase and rose to $45 million.
Opera Limited saw a 25% year-over-year increase in average revenue per user (ARPU), reaching an annualized $1.46 across its products and geographies.
Opera Limited Sponsored ADR Price and Consensus
Opera Limited Sponsored ADR price-consensus-chart | Opera Limited Sponsored ADR Quote
So, does the expanding user base driven by an expanding portfolio make OPRA stock a buy?
Strong Portfolio Aids OPRA’s Prospects
Opera Limited is enhancing user experience and engagement through its built-in AI, Aria, which integrates advanced features like voice and image generation, command line prompts, and page context awareness, ensuring a more accessible browsing experience.
It recently introduced Tab Commands, an innovative feature that allows users to manage their browser tabs by interacting with Aria, Opera’s built-in AI while prioritizing privacy by ensuring no tab information is sent to the server.
In second-quarter 2024, Opera Limited launched several new products and updates, such as Opera One for iOS and the Opera GX gaming browser, which helped expand its user base.
Opera GX, in particular, saw remarkable success, adding 500,000 new users in the second quarter. This brought its total to 30 million monthly active users (MAUs), up 27% year over year.
Opera Gains From Growing Client Base
OPRA’s prospects are also driven by its rich partner base that includes Alphabet’s GOOGL cloud business Google Cloud, Microsoft MSFT and NVIDIA NVDA.
In May, Opera Limited announced a collaboration with Alphabet’s Google Cloud to integrate Gemini models into its Aria browser AI, enhancing user experiences with advanced image generation and text-to-audio capabilities.
Opera Limited also launched an Arm-optimized version of its browser, offering over twice the speed on Arm-based Windows systems and enhanced AI capabilities with support from Microsoft’s App Assure and Qualcomm Technologies.
Opera Limited’s new AI cluster in Keflavik, Iceland, uses green energy and NVIDIA DGX SuperPOD with H100 Tensor Core GPUs. This setup promises four times faster training and 30 times faster inference, boosting AI capabilities for its browsers and services.
OPRA Q3 Guidance Positive
For third-quarter 2024, OPRA expects revenues in the $119-$121 million range, suggesting an increase of 17% year over year at the midpoint.
The Zacks Consensus Estimate for third-quarter 2024 revenues is currently pegged at $120.75 million, suggesting 17.64% growth year over year.
The consensus mark for earnings is currently pegged at 23 cents, unchanged in the past 30 days and indicating year-over-year growth of 27.78%.
OPRA's Zacks Rank & Valuation
OPRA’s shares are currently trading at a significant discount to the industry average, making the stock more attractive on the valuation front. With a Valuation Score of B, the stock appears to be valued favorably at present.
The forward 12-month Price/Sales ratio for OPRA stands at 3.18X, significantly below the industry average of 6.73X.
OPRA has a strong product portfolio and partner base, which are likely to provide traction to the demand for its products. The stock’s attractive valuation also makes it worth investing in right now.
At present, OPRA sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>Microsoft Corporation (MSFT) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Opera Limited Sponsored ADR (OPRA) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
