Shares of Opera (OPRA -4.65%) soared as much as 16.7% higher on Tuesday, goosed by a fantastic earnings report. The Norwegian maker of security-oriented web browsers and other online safety tools beat analyst expectations across the board and offered a bullish-guidance update for the full year. Opera's stock cooled down to a gain of 10.1% at the market close, but that's still a firm 52-week high.
Opera's Q3 aria, by the numbers
Opera reported several types of robust growth in the third quarter of 2024. Revenues rose 20% year over year to $123 million. Adjusted earnings per diluted American depositary share (ADS) jumped from $0.19 to $0.26 -- a 37% increase. Annualized average revenue per user (ARPU) landed at $1.66, up from $1.33 in the year-ago period.
Your average Wall Street analyst would have settled for earnings near $0.20 per ADS with sales in the neighborhood of $120 million. Opera's management also set up Q4 revenue guidance slightly above the current Street consensus.
How Opera keeps the beat going
Opera delivered muscular ad sales while reshuffling its target demographics a bit. The gaming-focused Opera GX browser saw 22% more monthly users. The flagship Opera One R2 browser posted a slightly smaller but more lucrative user group. Opera is targeting its own marketing moves on developed markets and full-featured smartphone browsers, allowing the less profitable feature-phone browser to lose users in emerging markets.
This online viking offers a tempting mix of solid growth, robust profit margins, and reasonable stock prices. Opera shares trade at just 9.4 times trailing earnings today. The modest pricing is a side effect of the digital-advertising market's lengthy downturn, causing analysts to set rather weak long-term profit targets for ad-based revenue collectors like Opera. This report pointed in the direction of a healthier ad market, making Opera's stock an interesting investment idea today.
