Opera Limited (NASDAQ: OPRA) has
been quietly but steadily building momentum as one of the more underappreciated
tech plays in the market. With strong revenue growth, a rising user base, and
expanding monetization strategies, the company is increasingly catching the eye
of growth and value investors alike. In its recently released Q1 2025 earnings
report, Opera posted impressive results that underscore both its operational
strength and potential for future expansion. Despite flying under the radar
compared to bigger tech names, Opera's financials and forward outlook suggest
the stock may be significantly undervalued, offering a rare blend of strong
fundamentals, growth potential, and income via its dividend.
1. About Opera Limited
Founded in 1995 in Oslo, Norway,
Opera Limited has evolved from a niche browser developer into a global internet
brand. The company offers a suite of products, including the Opera browser,
Opera GX for gamers, and Opera News, catering to a diverse user base. Opera's
commitment to innovation is evident in its integration of AI features and
expansion into mobile advertising, enhancing user experience and monetization
avenues.
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2. Opera Financial Performance
According to Stockanalysis, in Q1 2025, Opera reported
revenue of $142.7 million, marking a 39.61% increase from $102.21 million in Q1
2024. Earnings per share (EPS) rose to $0.20, up 19.22% from $0.17 in the same
period last year. The trailing twelve months (TTM) revenue reached $521.13
million, a 26.49% increase year-over-year. However, TTM EPS decreased by 44.8%
to $0.93, reflecting strategic investments in growth initiatives. Free cash
flow per share improved by 31.51% to $0.96, indicating strong cash generation. The
company maintains healthy margins, with a gross profit margin of 53.92% and a
net profit margin of 16.16%. Return on assets stands at 6%, and return on
equity at 9.2%, with a low debt-to-equity ratio of 0.01, highlighting financial
stability.
Over the past 5 years, Opera's
revenue has grown at a CAGR of 30.6%, while net income and free cash flow have
fluctuated. However, this year, Opera is projected to grow both its revenue and
net income at a double-digit rate.
3. Opera 2025 Financial
Forecast
Looking ahead, analysts are
optimistic about Opera’s continued trajectory. Forecasts for full-year 2025
revenue are $573.61 million, a 19.34% increase over 2024’s $480.65 million.
Non-GAAP EPS is expected to rise 22.92%, reaching $1.18 from $0.96 in 2024. These
projections underscore the confidence in Opera’s strategy and market execution.
Moreover, analysts have set a 12-month price target of $24.70, implying a 49.43% upside from current levels and reinforcing a Strong Buy consensus. These projections underscore the confidence in Opera’s strategy and market execution.
4. OPRA Stock Price
Performance and Valuation
At the time of making this article, Opera's stock price is $16.53 and has
appreciated by 26.18% over the past year, outperforming the S&P 500's 9.3%
gain. Over the past five years, OPRA shares have surged 195.1%, compared to the
S&P 500's 94.7% increase.
The stock offers a dividend yield
of 4.84%, providing income alongside capital appreciation. Valuation metrics
indicate attractiveness, with a TTM price-to-sales (P/S) ratio of 2.81 and a
forward P/S of 2.35. The TTM price-to-earnings (P/E) ratio is 17.78, with a
forward P/E of 14.46, and a TTM price-to-free cash flow (P/FCF) ratio of 16.97.
Looking at the valuation over the
past 5 years, OPRA stock's forward P/S ratio is below its average of 3.14, and
its forward P/E is also below the average of 17.95, suggesting the stock is
reasonably undervalued given its growth prospects.
5. Company Growth Potential
Opera's growth trajectory is
fueled by its strategic focus on AI integration, enhancing user engagement and
monetization.
- Product Innovation and AI
Initiatives
Opera is aggressively investing in new products and AI features, which can attract users and open new revenue streams. Notable Q1 developments include the launch of Opera Air, a mindfulness-focused web browser (the first of its kind). Opera Air integrates stress-relief and focus tools directly into browsing, showcasing Opera’s innovation culture. Another key initiative is the Browser Operator, an “agentic” AI assistant built into the browser (i.e. it can perform web tasks on behalf of the user).
Crucially, Opera has integrated its AI assistant Aria into the mobile browser space. In mid-April 2025, Opera announced that “Opera Mini, with over 100 M users, is adding its browser AI, Aria” to the app. Opera Mini is a leading Android browser (especially in emerging markets), and adding AI chat/model features to 100 M+ users greatly enhances the product. These AI-driven features (web research, content summarization, etc.) improve user experience and can increase engagement and ad-clicks. - User Base and Engagement
(MAUs, ARPU, GX)
Opera’s user metrics also point to growth potential. Average monthly active users (MAUs) in Q1 were 293 million. While overall MAUs were relatively flat, each user is becoming more valuable, the annualized average revenue per user (ARPU) jumped 45% YoY to $1.94. This ARPU lift, together with growing ad revenue, shows Opera is extracting more revenue from its audience. It reflects improvements like better ad targeting and expanding advertising in regions where Opera is strong.
Importantly, Opera’s gaming-focused browser (Opera GX) is also growing rapidly. Opera GX MAUs reached 34 million in Q1, a 14% increase year-over-year. Opera GX targets the lucrative gaming market segment; its growth helps diversify Opera’s user base and revenue sources. - Geographic Expansion and
Emerging Markets
Opera’s growth strategy places strong emphasis on global expansion, particularly in emerging markets such as Africa, Asia, and Latin America regions characterized by rapid internet adoption and rising digital ad spending. Opera Mini, the company’s lightweight browser, is a market leader in Africa with over a billion downloads globally, driven by its data-saving features and strategic partnerships, including free data offers in countries like Nigeria. The recent integration of its AI assistant, Aria, into Opera Mini further enhances its appeal in these cost-sensitive, high-growth regions. Although Q1 2025 results did not provide a regional breakdown, Opera’s continued focus on underpenetrated markets suggests substantial potential to increase user share and advertising revenue.
6. Risk to Consider
While Opera looks like a
compelling investment, investing in Opera carries some risk.
- User Growth Saturation
While Opera maintains a large user base of 293 million MAUs, overall user growth has plateaued. The Q1 report shows that MAUs were relatively flat year-over-year, suggesting that Opera may be reaching saturation in its core markets. Without accelerating user acquisition especially in mature regions, future revenue growth may depend entirely on increasing monetization (ARPU), which has natural limits. - Dependence on Advertising
Revenue
Opera is increasingly reliant on advertising, which made up 67% of total revenue in Q1 2025. While this segment grew 63% YoY, advertising is cyclical and vulnerable to macroeconomic downturns. A weak ad market or reduced digital ad spend (especially in emerging markets) could significantly impact Opera’s top line. Additionally, rising competition in digital advertising (from Google, Meta, etc.) could compress margins. - Regulatory and Privacy
Challenges
Opera operates globally, especially in regions like Africa, Asia, and Europe, where data privacy and digital regulations are tightening. New laws such as the EU’s Digital Services Act or evolving data regulations in emerging markets could increase compliance costs or limit Opera’s ad-targeting capabilities, impacting revenue from its growing ad-tech operations. - Execution Risk in AI and New
Products
Opera is investing heavily in AI-driven features (like the Browser AI assistant Aria, and the agentic Browser Operator), as well as niche products like Opera GX and Opera Air. While innovative, these products face execution risk, they may not scale profitably or gain widespread user adoption. Moreover, the AI space is highly competitive and dominated by much larger players (e.g., Microsoft, Google), making it difficult for Opera to stand out or monetize AI features significantly in the short term.
Conclusion
Opera Limited's impressive
financial performance, strategic growth initiatives, and solid market
positioning make it a compelling investment opportunity. With a strong balance
sheet, attractive valuation, and promising growth prospects, OPRA stock is
well-suited for investors seeking exposure to the dynamic digital economy.
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