On Friday, Citi updated its outlook on Opera (NASDAQ: NASDAQ:OPRA) stock, raising the price target to $21 from the previous $19 while keeping a Buy rating on the shares.
The adjustment follows Opera's release of its second-quarter financial results for 2024, which surpassed both Citi's and Bloomberg consensus estimates.
Opera's total revenue increased by 17% year-over-year to $109.7 million, marginally exceeding the upper end of the company's guidance. Adjusted EBITDA saw a significant 30% year-over-year increase to $26.6 million, outperforming the high end of guidance by 6%.
Opera's third-quarter revenue and adjusted EBITDA forecasts are set higher than previous estimates, signaling a positive outlook for the near future. The company has also revised its full-year 2024 revenue and adjusted EBITDA projections upward.
Management attributes this optimism to the robust performance of its e-commerce vertical, which is expected to benefit from the typically strong fourth quarter.
The company's management also indicated that sales and marketing expenses will be more concentrated towards the latter part of the year, aligning with the promotion of newly released products. This strategic planning is expected to support Opera's growth trajectory and enhance its market presence.
Citi's new price target is based on a multiple of 19 times the revised 2025 estimated earnings per share of $1.11, an increase from the previous multiple of 18 times.
The firm's decision to maintain a Buy rating reflects confidence in Opera's steady growth and its ability to consistently deliver on its financial targets. Opera's recent performance and upwardly revised forecasts present a positive outlook for the company's future financial health.
InvestingPro Insights
Opera's recent financial achievements and Citi's optimistic price target are further substantiated by some key metrics from InvestingPro. With a market capitalization of $1.28 billion and a healthy P/E ratio of 7.19, Opera stands as a compelling option for investors. The company's adjusted P/E ratio for the last twelve months as of Q2 2024 is higher at 17.99, indicating investor confidence in future earnings potential.
One of the InvestingPro Tips highlights Opera's robust cash position, which surpasses its debt, suggesting a strong balance sheet. Additionally, the liquid assets of the company exceed short-term obligations, providing Opera with a comfortable liquidity cushion. This is particularly reassuring for investors considering Opera's plans to ramp up sales and marketing efforts later in the year.
From a growth perspective, Opera's revenue growth of over 18% in the last twelve months as of Q2 2024 is impressive and aligns with the positive trajectory outlined by management. The company's stock has also experienced significant returns, with a 19.72% increase over the last month, adding to the narrative of a company on the rise.
Investors interested in deeper analysis will find additional InvestingPro Tips, with 10 more available that delve into various aspects of Opera's financial health and market performance. These insights can be found at InvestingPro's dedicated Opera page (https://www.investing.com/pro/OPRA), offering a comprehensive look at the company's prospects.
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