Opera Limited (OPRA 3.89%) just reported strong financial results for the third quarter, sending the stock up 5.5% as of 1:19 p.m. ET on Thursday. The company said revenue rose 20% year over year. Surging momentum led management to raise its full-year outlook.
The stock had sold off over the past year, so investors didn't have high expectations heading into the quarterly update. The shares trade at a modest valuation on a price-to-earnings basis and offer attractive upside from these levels.
NASDAQ: OPRA
Key Data Points
Why investors loved Opera's earnings report
It's not easy to find fast-growing companies in this macroeconomic environment that are reporting balanced growth in revenue and profits. Opera's advertising revenue now makes up 59% of the business. The company is leveraging its expenses to expand margins and increase earnings per share.
Earnings more than doubled versus the year-ago quarter to $0.18 per share. It's great to see Opera successfully monetizing its large base of 311 million monthly active users, as indicated by a 24% year-over-year jump in average revenue per user.
The gains on the top and bottom lines should support further gains for investors.
Why Opera stock could have more upside
For the full year, Opera sees revenue coming in between $394 million and $397 million, up from previous guidance of $380 million to $390 million. That represents growth of about 19% year over year.
With good expense control allowing earnings to rise even faster, the stock looks like a bargain. The forward price-to-earnings ratio currently sits at a modest 15, which is a significant discount to the average stock.
