The Browser Underdog: Opera's Surprising Surge◉ Abstract
Opera Limited (OPRA) presents a compelling investment opportunity, boasting an attractive valuation with a P/E ratio of 10.1x, significantly lower than the peer average of 66.5x. The company demonstrated strong financial performance in FY23, with 20% revenue growth reaching $396.8 million, accompanied by impressive cash flow growth of $82.8 million. Opera's debt-free status adds to its financial health. However, challenges persist, including its limited 2.4% market share in the competitive browser market, heavy dependence on browser revenue, and regulatory and technical risks. Despite these challenges, Opera's strengths and resilience, coupled with the industry's growth prospects, make it an attractive investment choice.
Read full analysis here.........
◉ Introduction
The internet browsing market is highly competitive, with approximately 5.3 billion monthly active users as of 2024. Google Chrome dominates the market with a 65.18% share, followed by Safari at 18.55%, Microsoft Edge at 5.26%, and Mozilla Firefox at 2.74%.
The market is expected to continue growing, driven by increasing internet penetration, the proliferation of smart devices, and the demand for enhanced web experiences. Additionally, the shift towards mobile browsing, with mobile devices accounting for a significant portion of internet traffic, will further fuel this growth, leading to projected expansion and innovation in the industry.
◉ Key Growth Drivers
1. Increased Internet Penetration: Global internet user numbers are steadily rising, particularly in developing regions where access to technology is improving.
2. Mobile Device Usage: The shift towards mobile browsing is significant, with browsers like Chrome and Safari leading in mobile usage due to their integration with popular operating systems (Android and iOS) respectively.
3.Technological Advancements: Continuous improvements in browser technology, including speed enhancements, security features, and user-friendly interfaces, attract more users.
4. Focus on Privacy and Security: Growing concerns about online privacy have led to increased demand for browsers that prioritize user data protection. This trend benefits browsers like Firefox and Opera, which emphasize privacy features.
5. Integration with Ecosystems: Browsers that integrate well within their respective ecosystems (e.g., Safari with Apple devices) tend to retain users more effectively due to seamless functionality across devices.
◉ Major Players
Today, our discussion will center on Opera, a niche browser vendor navigating the global internet browsing market dominated by Google Chrome and Safari.
This report presents an in-depth examination of Opera's technical and fundamental metrics.
◉ Company Overview
Opera Limited NASDAQ:OPRA is a Norway-based tech innovator, established in 1995. Listed on NASDAQ (OPRA), Opera boasts a global team of 500+ employees. Its diverse portfolio includes Opera Browser, Opera Mini, Opera GX, and Opera News. The company operates through four segments: Browser and Search, Advertising, AI-driven Content Discovery, and Fintech (Opera Pay). Opera's growth strategy focuses on emerging markets, AI enhancements, advertising expansion, and fintech development.
◉ Investment Advice
💡 Buy Opera Limited NASDAQ:OPRA
● Buy Range - 16.8 - 17.8
● Sell Target - 23.5 - 24.5
● Potential Return - 33% - 38%
● Approx Holding Period - 12-15 months
◉ Revenue Breakdown (FY23)
● Total Revenue: For the full year 2023, Opera reported total revenue of $396.83 million, up from $331.04 million in 2022, marking a 20% year-over-year growth.
● Advertising Revenue: Advertising revenue constituted approximately 59% of total revenue, amounting to around $234 million. This segment grew by 24% year-over-year, driven by the success of the Opera Ads platform and browser monetization strategies.
● Search Revenue: Search revenue accounted for about 15% of total revenue, totaling approximately $60 million, with a growth rate of 15% year-over-year. This growth is attributed to targeting users with higher monetization potential, particularly in Western markets.
● Technology Licensing and Other Revenue: This segment represents a smaller portion of the overall revenue, contributing roughly $0.1 million, reflecting the company’s ongoing efforts to monetize its technology beyond its core browser offerings .
◉ Strengths & Weaknesses
The company has experienced significant growth and innovation in recent years. However, it also faces various challenges. Here’s a detailed analysis of its strengths and weaknesses:
● Strengths:
1. Innovative Features:
➖ Opera GX Gaming Browser: Tailored for gamers with CPU and RAM limiters, plus integrations with Twitch and Discord.
➖ Built-in Ad Blocker: Improves browsing speed by blocking ads and tracking cookies.
➖ Free VPN: Enhances privacy by encrypting traffic and hiding IP addresses, allowing access to region-restricted content.
2. Diverse Revenue Streams: Revenue comes from multiple sources, including advertising (about 59%) and search (around 15%), providing financial stability.
3. Financial Growth: Consistent revenue growth, reaching $397 million in 2023, with positive projections for 2024.
4. Strategic Partnerships: Collaborations with major tech companies enhance service offerings and market reach.
● Weaknesses:
1. Limited Market Share: Holds only about 2.4% of the global web browser market, significantly trailing competitors like Google Chrome.
2. Heavy Dependence on Browsers: About 82% of revenue comes from web browsers, making the company vulnerable to shifts in user preferences and market trends.
3. Regulatory Vulnerability: Risks associated with changes in affiliate marketing regulations and data protection laws could impact revenue.
4. Technical Challenges: Users report stability issues and bugs that affect overall experience.
◉ Technical Aspects
● Weekly Chart
➖ In July 2023, the stock peaked at around the 27 level but then encountered considerable selling pressure, leading to a drop towards the 10 level.
➖ Following an extensive period of consolidation, the price has recently achieved a breakthrough and is trending upwards.
● Daily Chart
➖ The daily chart reveals the formation of an Inverted Head & Shoulders pattern.
➖ After a recent breakout, the stock price is currently consolidating just above the breakout level, with expectations of future increases.
◉ Technical Indicators
1. RSI (Daily Chart)
➖ Current RSI of this stock is 66.42, which indicates the strength of buyers.
2. ADX & DI (Daily Chart)
➖ Increasing ADX value above 20, indicated the strength of the trend, thereby uptrending ADX confirms the bullish or bearish supportive decisions. Along with the rising ADX, and the +DI is above (or crossing) -DI, indicates the long trades should be favoured.
3. MFI (Daily Chart)
➖ The current MFI is 59.04, suggesting that the stock is not in an overbought state.
4. EMA’s (Daily Chart)
➖ The stock price is currently positioned above all key EMAs, indicating robust momentum.
◉ Relative Strength
➖ The chart highlights Opera's impressive outperformance of the Nasdaq Composite index, driven by a substantial 50% annual return.
◉ Revenue and Profit Analysis
● Year-over-Year
➖ Opera Limited reported strong financial performance in fiscal year 2023, with revenue reaching $396.8 million, representing a 20% increase from $331 million in fiscal year 2022.
➖ The company's EBITDA also saw significant growth, rising 35% to $69.2 million from $51.2 million in the prior year, while the EBITDA margin expanded to 17.4% from 15.5%.
● Quarter-over-Quarter
➖ Opera Limited's quarterly performance ending September 2024 was equally impressive, with revenue climbing 12% to $123.2 million from $109.7 million in the preceding quarter and 21% from $102 million in the same quarter last year.
➖ Additionally, EBITDA increased 5% to $27.3 million, and diluted earnings per share (LTM) edged up to $1.78 from $1.75 in the previous quarter.
◉ Valuation
1. P/E Ratio
● Current P/E vs. Peer Average P/E
➖ Analyzing the P/E ratio reveals that OPRA stands at 10.1x, highlighting a substantial undervaluation when compared to the peer average of 66.5x.
● Current P/E vs. Industry Average P/E
➖ Within the US software sector, OPRA's P/E ratio of 10.1x is markedly lower than the industry average of 41.9x, signaling that it is relatively inexpensive.
2. P/B Ratio
● Current P/B vs. Peer Average P/B
➖ Examining the P/B ratio, OPRA's current figure of 1.8x falls short of the peer average of 5.5x, indicating a relative undervaluation.
● Current P/B vs. Industry Average P/B
➖ When juxtaposed with the industry average, OPRA's P/B ratio of 1.8x points to a notable undervaluation, as the industry average stands at 3.7x.3.7x.
3. PEG Ratio
➖ A PEG ratio of 0.07 implies that the stock is undervalued in relation to its anticipated earnings growth.
◉ Cash Flow Analysis
➖ In the fiscal year 2023, operational cash flow saw impressive growth, soaring to $82.8 million, a significant rise from the $56.7 million recorded in fiscal year 2022.
◉ Debt Analysis
➖ The company proudly maintains a completely debt-free status, showcasing its strong financial health.
◉ Top Shareholders
➖ Arrowstreet Capital's stake in the company stands at 1.23%, indicating a 4.9% reduction in holdings from the prior quarter.
◉ Analyst Price Target
➖ The 12-month consensus price target for Opera stands at $24.20, implying a substantial potential appreciation of 32% from current levels, presenting an attractive investment opportunity.
◉ Conclusion
Opera's attractive valuation and impressive financial performance make it a compelling investment opportunity. However, the company's financial outlook is not without challenges. Market uncertainty and unforeseen events pose risks, while its e-commerce monetization efforts remain vulnerable to market volatility and competition. Additionally, Opera operates in a highly competitive browser market, where intense rivalry could impact user engagement, retention, and revenue. Despite these challenges, the industry's significant growth prospects support a positive outlook, driven by Opera's strengths and resilience, making it an attractive investment choice.
OPRA trade ideas
OPRA Analysis 8/20Disclosure: As of 8/20 I am long Opera Limited NYSE: OPRA
Opera is a browser company available on Mac, PC, and Mobile. They earn revenue through advertisements, as well as a search partnership with Google.
*This partnership with Google is a key risk for Opera as if the relationship falls apart they will lose a large portion of their revenue*
As a customer of Opera I can say they have a quality product and is well reviewed by the people I know who use it. Most of their user growth is organic. And with only 8% of the market going to Opera there is large room for growth.
Looking at the qualitative factors they have $0 debt, revenue has grown since their IPO in 2019 with a dip in 2021 that quickly recovered. Over this time period they have seen stable margins and a growing book value.
The valuation of this company is the main reason I am looking at it. With the price/book being 1.25 and the book value increasing there is limited downside to this company. The earnings+dividend yield is 21% which is a rough estimate of what your investment could return off of the current earnings. Please note that this does not include growth, so potential returns could be higher or lower.
Of course all investment decisions must be evaluated on their own merit of risk/reward and what factors you value. As always this is not financial advice, and read the annual reports and financial information prior to making any decisions.
Have a great day everyone!
🚀 OPRA Trade Analysis 🚀📊 Company Overview:
Opera NASDAQ:OPRA : Known for its web browsers, Opera is expanding into the AI space with its Aria browser AI service, attracting over 1 million users.
Financial Performance: Opera's revenue surged by 17% YoY in Q4, surpassing guidance and consensus estimates, indicating strong growth potential.
User Acquisition: Opera's focus on user acquisition in lucrative western markets has driven increases in active users and average revenue per user.
💼 Trade Setup:
Entry: Consider entering above the $13.00-$13.50 range, as the stock shows bullish momentum.
Target: Aim for a target price range of $20.00-$22.00, reflecting potential growth opportunities and positive financial performance.
Risk Management: Set a stop-loss to protect against adverse price movements and manage risk effectively.
📈 Rationale:
Growth Potential: Opera's expansion into the AI space and its successful track record in user acquisition bode well for future growth.
Financial Performance: Strong Q4 revenue growth and surpassing estimates indicate bullish sentiment and market confidence.
Market Positioning: With a growing user base and innovative AI services, Opera is well-positioned to capitalize on opportunities in the software landscape.
🔍 Note: Stay informed about market developments and company news to adjust your strategy accordingly. Monitor price action and key technical levels for optimal entry and exit points. As always, conduct thorough research and consider consulting with a financial advisor before making any trading decisions. Good luck! 🌟📊
$OPRA: Technical setup supported by blowout YOY earnings growth.OPRA:1W
Using a 5 year look-back I see recent price structure from the October 2022 bottom as highly impulsive. Historical resistance (downward yellow arrows) has become support (upward yellow arrows). If you're a historical 'price memory' believer, which I am, this will make sense.
RSI is flattening out to the downside with slightly higher lows. Stochastic Momentum Index is clearly printing higher lows in conjunction with signal crossing above its EMA to the bullish side. Taken in composite we can infer that downside momentum has waned and appears to be gaining momentum to the upside.
Price has been rejected at the VWAP off highest highs at the 14.44 level and I would like to see a weekly close above this price point as confirmation that upside trend strength is intact.
1D, 4H and 1H charts are currently overbought after the recent 'double beat' on revenues and earnings that illustrate record year-over-year EPS growth from 0.13 cents per share to 2.05 dollars per share. For these technical indicator based reasons I will be looking for a minor, post-earnings, pullback in price to find an entry point from current levels, but there is no guarantee I will get it.
From a short term (4-6 weeks) trading standpoint, structure on small caps as represented by the AMEX:IWM appears ready to break out to the upside as a potential 'catch up' trade to the consolidation going on in the large/mega cap space. (see image directly below)
Given the bullish structure (cup and handle) taking shape in the AMEX:IWM and the increased potential for a small cap break out to the upside, I very much like NASDAQ:OPRA as a 'catch-up' trade vehicle here.
From a middle to longer term standpoint, NASDAQ:OPRA appears ready to make a larger move up to the 0.786 (54.25) and potentially the 1 Fib Extension (85.66) in the next year or two assuming optimal market conditions and high level execution from the NASDAQ:OPRA management continue.
My reasoning here might seem extreme however it is as much to do with the failures of the NASDAQ:GOOG Gemini AI and the inability of Google to effectively execute on their AI initiatives that provide a window of opportunity for the Opera team. (see link to Time article below)
There has long been a dearth of serious external competition for the Google browser after significant failures by well capitalized tech incumbents like Microsoft and well intentioned upstarts such as Duck Duck Go. While it might seem far-fetched at current, I believe the NASDAQ:OPRA browser could be that 'external threat' to Google's Chrome emerging on the horizon of the competitive landscape.
I see NASDAQ:OPRA as the leaner, sleeker and scrappier model ready to take browser market share from the mega cap behemoth whose internal weaknesses and ideological incentives seemingly find the tech giant incapable of getting out of its own way in the browser AI arms race.
NASDAQ:OPRA launched Aria in May of 2023 which interacts with OpenAI's GPT through Opera's own Composer infrastructure. (see Opera press release below) This difference allows NASDAQ:OPRA to integrate Open AI's 'open source' model that has been a superior AI engine to Gemini at every step of the way assuming we are measuring AI product superiority by prompt response accuracy. Let me be clear in saying that I do not see NASDAQ:OPRA as overtaking NASDAQ:GOOG in market cap or revenues, that would be crazy to suggest, but I do see them as the best competition from a product design standpoint in the browser space at the time of writing this article.
In closing I will say that it is a rare thing to find a small cap, future-tech play with massive upside volatility potential and a solid dividend yield (5.53%) attached. Granted, the competition is stiff and capable of awakening at any moment, but Google's internal misfiring is Opera's opportunity to take share as the higher performing browser in the browser space.
Short term (6-8 weeks) price target: 21-23.
Mid-term (6-8 months) price target: Probable, 54-65.
Long-term (18-24 months): above 85.
Time Article: time.com
Opera Press release:
press.opera.com
MOMENTUM STOCK: Opera starting to recover?NASDAQ:OPRA is starting to look interesting again. After a MASSIVE 600% run followed by a deep 60% pullback some of the signals are showing some life might be coming back in the stock.
We are past earnings so hopefully no more surprises to come.
The RSI is heading back up
We got a deep cross of the MACD over the signal line, well below the zero line
Might need to wait for confirmation but could be one to watch. Definitely not trading advice, more just a previous runner that might be changing direction.
OpraOpra has a lot of upside potential here. It has pulled back 50% from the high after a monthly breakout. I like the risk-reward ratio for a long position here, with an entry between 13-14 and a stop loss under 9, targeting 28-33
OPRA drops after earnings beat LONGOPRA on the 30-minute chart dropped after an earnings beat as apparently a lot of traders
expected better. The volume profile shows the vast majority of the trading occurred in
the 12.75 to 13.05 range. This heavy accumulation should result in price movement in due
time per Wycoff. I believe that a long trade is setup for a Fibonacci retracement of the
drop into the middle levels and so 14.75 as shown by the indicator on the chart. The mass index
indicator reached the reversal zone and then triggered with a drop below it confirming
a probable reversal. The MACD shows bullish divergence.
I will place a market order with a stop loss at 12.0 just below the POC line which is below
present market price. This is a safe 10-13% trade which may take into the beginning of next
week. I will take call option contracts as well.
Momentum Stock: Opera LimitedOpera Ltd provides mobile and PC web browsers and operates in two primary segments, Browser and News, and Other. The company offers a variety of mobile and PC browser products, including Opera Mini, Opera for Android and iOS, Opera GX Mobile, and Opera Touch. Additionally, it also provides the Opera News service, a personalized news discovery and aggregation service powered by AI.
The company has shown robust price performance over the past year, with a 195.34% increase in share value. The growth has not just been in the long term; in the short term, the price has surged by 23.06% over the last month and 4.27% over the last five days. The current price is $13.66, just shy of its 52-week high of $13.78.
The company's market capitalization is $1.22 billion, indicating that it is a small-cap company. Despite this, Opera has seen substantial revenue growth, with a YoY quarterly revenue growth of 21.6%. However, it's crucial to note that it has seen a YoY quarterly earnings growth decline of -60%.
From a valuation perspective, the trailing PE ratio is at 33.975, which may seem high for some investors. However, given the company's growth, this could be justified. The company's Price to Sales ratio (TTM) is 2.22, and its Price to Book ratio (MRQ) is 0.65, suggesting that the stock might be undervalued relative to its assets.
From a technical perspective, the stock is in an upward momentum. The stock's current price of $13.66 is well above both the 50-day moving average of $10.36 and the 200-day moving average of $6.74. The volume has also been increasing, indicating a strong interest in the stock.
Furthermore, the technical oscillators, including the Relative Strength Index and MACD, indicate that the stock is in a bullish trend. The RSI is 69.69, which is just below the overbought threshold, suggesting that the stock still has room for upside.
However, investors should be aware of the increasing short interest in the stock, which has gone from 131,774 to 212,609. While not a large percentage of the float, this increase could indicate some market skepticism.
Opera does not pay a dividend, so it may not be suitable for income-focused investors. However, the company has a solid profit margin of 11.53% and a reasonable operating margin of 16.42%.
Wall Street analysts seem bullish on the stock. The stock has a rating of 5, with 4 analysts giving it a 'Strong Buy' rating. The target price is $14.25, suggesting a potential upside of around 4.3% from the current price.
Opera Ltd appears to be an interesting investment opportunity. The company is showing strong price gains, and its valuation ratios suggest that it might be undervalued relative to its assets and sales. The positive analyst ratings and technical indicators also lend support to this view. However, as always, potential investors should conduct their own thorough research before making investment decisions.
Right now to me it looks too expensive, and I would want to wait for a pull back closer to the SuperTrend line and an RSI in the low 50's. I would use TradingView to set an alert on the RSI to message me when it is CROSSING UP through 55. That way it has had its pullback and is now heading back up and I don't have to look at it again until then. Nice run so far though.
In terms of risk management, this is a much more volatile stock and you would need a higher trailing stop loss of around 18% which would have kept you in most of this trade. If it broke below that it could have been a good sign to exit and look for a new entry when the trend resumed.
One to watch.
OPRA Opera - Alternative Browser Earnings Play LONGOPRA has had a consistent upwards trajectory as shown on the 4H chart.
189% price increase in approximately 125 trading days is about 1.5% daily return,
This could be a good set-it-and-forget-it play on the very positive earnings report.
OPRA beat earnings guidance by 34% despite advertising pullbacks in a moderate
recession. The revenue held steady giving cause shareholders to see the ship
as sailing well despite the headwinds it is exposed to.
The chart shows a dramatic increase in volume in the past month which is
powering the price action. On the long term volume profile, price is sitting
above the POC, buyers are dominating right now and short sellers if anything
are buying to cover giving further fuel to the price appreciation.
As the modest pirce per share and great return on any recent ivestment,
I see OPRA as heading higher into blue sky (all-time high). Today's pullback
of 3% is the entry @ market in the morning.
what do you think about that chart should we exit that trade at 13.95 or wait for a bearish trend to settle
Opera Announces $50 Million Share Repurchase Program!!!OPRA: Opera Limited
2022-01-20 08:30:00
Opera Announces $50 Million Share Repurchase Program
trendlines dont lie, OPRA analysis longterm resistance will kick in soon, if long consider taking profits or maybe start hedging with puts, i dont see this going higher than 14 anytime soon, short!!
$OPRA symmetrical triangle ready to breakOPRA has been tightening into the apex of symmetrical triangle. I really like the look of this one.
I plan to buy it tomorrow.
$OPRA Very Bullish pattern establishing in Opera ltd From a charting perspective NASDAQ:OPRA is starting to look very attractive.
After a initial IPO sell off the stock has formed a base and is now stepping its way back up on good volume.
RSI ,MACD, and the OBV are very positive.
Price has bullishly broken the cloud resistance.
Please also take into account the earnings release from May22nd, below is a transcript of the CEO comments within the call in which he outlines the BEAT and also RAISES guidance
"Let me now get into the quarter and guidance and then we will open it up for questions. Opera had a record revenue quarter reaching $51.3 million, up 30% versus the year ago quarter. Search revenue represented 40% of the total or $20.6 million, up 2% year-over-year or up 5% on a constant currency basis. As communicated over the past year, while we expect Search to continue to grow, we expect it to become the smaller share of our revenue over time. Search is already a pretty well optimized revenue source for us with the revenue as a function of our search partners monetization as well as our own browser user base footprint.
Advertising revenue was 29% of the total or $14.1 million, up 10% year-over-year. This growth was driven by increased user numbers as we have been prioritizing user growth over monetization."
Fin-tech revenue, which is a new revenue category, represented 13% of total revenue or $6.5 million. This scaled significantly from the fourth quarter when we acquired OKash and we expect it to be a growing percentage of revenue going forward. Retail revenue represented 13% of total or $6.8 million, in other words, quite stable versus last quarter.
With that said, we are raising our expectation for 2019 revenue. Our increased range is $230 million to $240 million representing year-over-year growth of 34% to 39%. This compares to our prior range of $220 million to $230 million, and for now reflects moderate increases in monetization, limited gains from browser product initiatives, and finally some contribution from taking micro lending to new markets. We are also guiding for adjusted EBITDA between $30 million to $45 million for the year."
COMPANY PROFILE
Opera Ltd. engages in the provision of web browsers through its subsidiaries. Its products include Opera browser for Windows, iOS, and Linux computers; as well as the mobile apps Opera for Android, Opera Mini, Opera Touch, and Opera News.
