Opera Limited's Stock Soars 19% Amid Strong Q2 Results

In a recent report, Opera Limited's shares surged 19% in the past month, outperforming the Computer & Technology sector. The company reported a 17% year-over-year revenue growth driven by advertising and search revenues, showcasing its strong growth potential.

Date: 15-09-2024

AI Rating: 7

Opera Limited (OPRA) has showcased excellent financial performance in the second quarter of 2024, contributing to its stock's remarkable 19% increase over the past month. This performance is notable as it contrasts with the broader Computer & Technology sector's decline of 0.3% and the Internet - Content sector's modest rise of 1.9%.

One of the most impressive aspects of OPRA's results is its revenue growth. The company reported revenues of $110 million, representing a year-over-year growth of 17%. This increase can be attributed to significant progress in user adoption and effective monetization strategies, especially in its advertising and search segments. Notably, advertising revenue surged by 20% to reach $65 million, while search revenues increased by 15%, totaling $45 million. Such steady revenue growth is a strong indicator of OPRA's ability to capitalize on expanding market opportunities.

Moreover, the company experienced a 25% rise in Average Revenue Per User (ARPU), which now stands at $1.46. This metric underlines the effectiveness of its business model, reflecting higher engagement and better monetization of services offered to users.

Looking ahead, Opera's optimistic guidance for Q3 2024 is particularly encouraging. The company forecasts revenues between $119-$121 million, suggesting a yearly increase of 17% at the midpoint. The consensus estimates for both revenue and earnings further reinforce this positive outlook, indicating strong continued growth.

Despite this positive performance, the analysis notes that OPRA is trading at a significant valuation discount compared to its industry, with a Price/Sales ratio of 3.08X compared to the industry average of 6.17X. This suggests that OPRA may be undervalued and presents a compelling investment opportunity.

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