Shares of Opera (OPRA 2.09%) 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.
NASDAQ: OPRA
Key Data Points
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.
