On Wednesday, B.Riley, a well-known financial services firm, increased its price target for Opera Limited (NASDAQ: NASDAQ:OPRA) to $25.00, up from the previous $24.00, while maintaining a "Buy" rating on the stock. The adjustment follows Opera's third-quarter earnings, which surpassed analyst expectations, particularly in terms of revenue growth.
Opera's performance was notably bolstered by its E-commerce segment and GX platform, both of which experienced robust growth. In response to the company's third-quarter earnings, the analyst from B.Riley commented that the results were impressive and that the revised outlook for 2024, although cautious due to fourth-quarter seasonality, still indicates a positive trajectory for the company's E-commerce advertising business.
The analyst also highlighted a series of recent and forthcoming product launches, including browser updates, which are expected to enhance user experience and engagement. These developments, along with Opera's strategic focus on monetization improvements and its emphasis on high-value markets and GX users, are anticipated to contribute to sustained revenue and profit growth in the near to medium term.
In summarizing the firm's stance, the B.Riley analyst stated, "We view a slew of recent and upcoming product launches positively for user experience and engagement, which, combined with monetization gains and Opera's ongoing focus on higher-value Western market and GX users, should drive healthy growth in top-line growth and profits over the near/medium term. We reiterate our Buy rating and raise PT from $24 to $25."
The raised price target and continued endorsement from B.Riley reflect a vote of confidence in Opera's business model and growth prospects. Opera's stock performance and investor sentiment may be positively influenced by such optimistic assessments from financial analysts.
In other recent news, Opera has reported substantial financial growth. The company's second quarter of 2024 saw a 17% year-over-year increase in total revenue to $109.7 million, and a 30% growth in adjusted EBITDA to $26.6 million. Analyst firms TD Cowen, Citi, and Goldman Sachs (NYSE:GS) have maintained a Buy rating on Opera shares, citing the company's strong e-commerce performance and the integration of AI efficiencies as reasons for their positive outlook.
Opera is also making significant strides in artificial intelligence. The company recently made its integrated AI, Aria, accessible to all users without the need for logging in. This development is part of Opera's broader strategy to enhance its browser AI capabilities. Opera has also launched its AI-powered browser, Opera One, for iOS devices and announced plans to integrate on-device AI capabilities into its Opera One and Opera GX browsers.
These recent developments, along with Opera's robust financial performance, position the company favorably in its industry. Opera's ongoing focus on innovation and its aggressive approach to capturing market share are factors that analysts believe will drive the company's performance. Opera's strategic direction, combined with its financial performance, is anticipated to keep it at the forefront of revenue growth in its sector.
InvestingPro Insights
Opera Limited's recent performance aligns well with B.Riley's optimistic outlook. According to InvestingPro data, Opera's revenue growth stands at 17.76% for the last twelve months as of Q2 2024, with a quarterly growth of 16.57% in Q2 2024. This robust growth supports B.Riley's positive view on the company's revenue trajectory.
InvestingPro Tips highlight that Opera holds more cash than debt on its balance sheet and that its cash flows can sufficiently cover interest payments. These factors contribute to the company's financial stability, which is crucial for sustaining its growth initiatives and product launches mentioned in the analyst's report.
The stock's strong performance is evident from InvestingPro data, showing a 62.86% price total return over the past year and a 48.8% return over the last three months. This aligns with the analyst's bullish stance and increased price target.
For investors seeking a deeper understanding of Opera's potential, InvestingPro offers 13 additional tips, providing a comprehensive view of the company's financial health and market position.
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