Opera: A Stealthy Tech Stock with a Bright Future
In the world of technology stocks, it's easy to overlook the quiet achievers. Opera, a company based in Oslo, Norway, is one such example. While it may not be a household name, Opera's recent performance and prospects make it an intriguing investment opportunity, especially for those with a keen eye for value.
Steady Growth, Smart Monetization
Opera's growth might not be as flashy as some AI-focused startups, but it's solid and sustainable. The company's 2025 revenue growth of 28% to nearly $615 million is impressive, especially when you consider its adjusted earnings also grew by a healthy 17% to $1.12 per share. But what's even more intriguing is how Opera is monetizing its user base.
Opera's advertising business, which accounts for 65% of its revenue, is thriving. The company has successfully increased its advertising partners, and its "user intent query" feature is a clever way to boost revenue. This segment, which grew by 16% in the fourth quarter, has the potential to drive significant growth in the future due to its high conversion rates and improved lead quality for advertisers.
Focus on Higher-Value Users
Opera is not just about quantity; it's about quality. The company has strategically added 2 million monthly average users (MAUs) in Western markets, bringing its total Western MAUs to 60 million out of 284 million total MAUs. This shift towards higher-value users is reflected in Opera's 26% year-over-year increase in average revenue per user (ARPU).
Guidance and Valuation: A Compelling Case
Opera's guidance for 2026 is optimistic, with an anticipated 17% to 20% increase in revenue. The company expects its adjusted EBITDA margin to remain stable at 2025 levels, but given its past performance, it's not unlikely that Opera will exceed expectations once again. Analysts are predicting a 25% jump in earnings this year to $1.40 per share, with continued growth of over 20% in the following years.
What makes Opera an even more attractive investment is its valuation. Trading at just 13 times earnings, Opera is significantly discounted compared to the Nasdaq-100 index's earnings multiple of 31. This discount, in my opinion, doesn't reflect Opera's growth potential and the value it offers.
A Deeper Look
Opera's focus on user intent and its ability to monetize this data is a fascinating strategy. It shows a deep understanding of its users and the potential for targeted advertising. As the company continues to refine this approach, we can expect to see even more impressive results. Additionally, Opera's expansion into Western markets is a strategic move that could pay off handsomely, given the higher spending power and potential for increased ARPU.
Conclusion
Opera is a stealthy tech stock with a bright future. Its steady growth, smart monetization strategies, and attractive valuation make it an ideal investment for those seeking value in the tech sector. With its focus on user intent and expansion into higher-value markets, Opera is well-positioned for continued success. Personally, I think Opera is a stock worth keeping an eye on, and for those with $100 to invest, it could be a wise choice.
