Opera stock price is rising: could OPRA jump 40%?

Opera stock price has staged a strong comeback in the past few months as the company has continued to report strong financial results. The OPRA share price surged to $19.93, its highest level since July 2023. It has jumped by over 470% from its lowest level in 2022, giving it a market value of over $1.75 billion.

Opera is a good niche company

Opera is a niche company that operates in one of the most competitive industries globally. Its core product is a browser, which can be installed on smartphones, tablets, and computers. 

It is an underdog that competes with the biggest companies globally. Google owns Chrome, which has a commanding market share of 60%. Chrome comes installed on platforms like Chromebooks and Android devices.

Apple has Safari, which comes installed across all its products. Similarly, Microsoft has Edge, which has a small but growing market share. On top of this, there are hundreds of browsers out there, including Phoenix, Aloha, Firefox, and DuckDuckGo. 

Opera makes its money in several ways. Most of its revenue comes from Google, which pays it money to ensure that its search engine is the default. It also makes money by inking marketing deals with companies like Booking, Samsung, and eBay. These firms want exposure to its millions of users.

Opera has also expanded to other industries. It has moved to the news industry, where it offers Opera News, a platform that aggregates news content, especially in the emerging markets. It also launched its VPN solution and Aria, its AI chat bot, 

Over time, Opera’s business has continued growing, with its annual revenue rising from $177 million in 2019 to over $396 million last year. 

Strong earnings and guidance

The most recent catalyst for the Opera stock price was its strong earnings, which showed that the company was still growing.

Opera’s revenue rose to $123 million in the last quarter, a 20% increase from the $102 million it made in the same period last year. Its net income jumped to $17.9 million.

This growth happened after the company’s monthly active users jumped to 296 million. Notably, the number of active users in western countries jumped to over 51 million during the quarter. These users stood at 34 million in the same period in 2020.

Opera also increased its forward guidance. It expects that its annual revenue will be between $470m and $473m, while its adjusted EBITDA will be between $112m and $114m. 

Most importantly, Opera is a high-margin company. It has a gross profit margin of 53%, higher than the sector median of 50.26%.

It also has a net income margin of 35%, also higher than the sector median of 3.55%. The company has tools to continue growing these margins over time since its business is asset-light. It can also add more solutions and make money over time. A good example of this is what it did with its VPN solution.

Analysts are optimistic about the Opera stock price, with the average target being $24, higher than the current $18. They expect that its annual revenue will continue having double-digit growth in the next few years.

A key risk for Opera is that it still depends on Google for a substantial part of its revenue. On the positive side, Google will still remain being a key provider as long as it demonstrates more user growth. 

Opera stock price analysis

The weekly chart shows that the OPRA share price has been in a strong bull run in the past few months. It recently crossed the important resistance level at $16.78, its highest level in March and June this year.

Opera share price has remained above the 50-week and 25-week moving averages. It has also moved above the 38.2% Fibonacci Retracement level. 

Therefore, the stock will likely continue rising as bulls target the all-time high, which is almost 40% above the current level. A drop below the support at $16.78 will invalidate the bullish view.

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