Opera Limited made significant strides in 2024, marking a 16.1% increase in YTD shares. Although this growth trails behind the Computer & Technology sector’s surge of 25.4%, Opera outperformed the Internet – Content sector’s 6.1% rise.
One key driver of Opera Limited’s success is its continuous growth in user adoption and monetization efforts, particularly in advertising and search revenues.
In Q2 of 2024, advertising revenues climbed by 20% YoY to $65 million, while search revenues saw a 15% increase, reaching $45 million. Moreover, the company observed a 25% YoY rise in average revenue per user, hitting $1.46 across its products and geographies.
The Impact of Opera’s Strong Portfolio
Opera Limited’s strategic focus on enhancing user experience and engagement through its AI integration, Aria, has yielded promising results. Aria incorporates advanced features like voice and image generation, command line prompts, and page context awareness to deliver a more accessible browsing experience.
Recent innovations such as Tab Commands have allowed users to manage browser tabs efficiently while safeguarding privacy by keeping tab information secure from servers. The introduction of new products like Opera One for iOS and the Opera GX gaming browser has also played a pivotal role in expanding its user base.
Opera’s Growth Through Partnerships
Opera’s collaboration with tech giants like Alphabet’s Google Cloud, Microsoft, and NVIDIA has significantly contributed to its success. For instance, the integration of Gemini models into Opera’s Aria browser AI through a partnership with Google Cloud has enhanced user experiences with advanced image generation and text-to-audio capabilities.
Additionally, Opera’s introduction of an Arm-optimized browser version, supported by Microsoft’s App Assure and Qualcomm Technologies, has improved browsing speed on Arm-based Windows systems. Opera’s AI cluster powered by NVIDIA DGX SuperPOD with H100 Tensor Core GPUs in Keflavik, Iceland has further enhanced its AI capabilities, promising faster training and improved inference for its services.
Positive Outlook for Opera in Q3
Looking ahead to Q3 2024, Opera Limited anticipates revenues in the range of $119-$121 million, indicating a 17% YoY increase at the midpoint. The Zacks Consensus Estimate echoes this positive outlook, with a projected revenue growth of 17.64% YoY.
Furthermore, the consensus estimate for earnings remains steady at 23 cents, showing a 27.78% YoY growth. Opera’s shares, trading at a substantial discount compared to the industry average, present an enticing investment opportunity due to its strong product portfolio and valuable partnerships.
Opera Limited’s continued success and attractive valuation have earned it a Zacks Rank #1 (Strong Buy), making it a compelling choice for investors seeking long-term growth potential.
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