The Opera stock price has pulled back in the last two consecutive weeks, erasing some of the gains made earlier this year. OPRA has dropped from $22.5 to $18 as investors remained concerns about its growth trajectory. So, will the Opera share price rebound after its strong earnings?
Opera’s business is doing well
Opera is a technology company that operates in the interesting business of browsers that companies like Google, Apple, and Microsoft dominate.
It operates a popular desktop and mobile browser that millions of users worldwide use. These users appreciate the quality of its applications, which they believe is better than preinstalled apps like Chrome, Safari, and Edge.
Opera makes most of its money from Google, which pays it millions of dollars a year to have it as the default search engine. It then receives millions of dollars from advertisers like Booking, Facebook, Netflix, and Amazon.
Opera published strong financial results, which showed that its business continued doing well in the fourth quarter.
These results showed that the revenue rose by 29% to $145.8 million in the fourth quarter, bringing its annual figure to $480 million.
This growth happened as the search revenue increased by 17% and its advertising segment grew by 38%. The growth was also driven by the Opera GX Browser, which is mostly used by gamers.
Analysts are optimistic that Opera’s business will continue doing well. The average revenue estimate for the current quarter is $131 million, up by 28% from the same period in 2023. These are strong numbers since Opera has been around for many years.
Opera’s annual revenue will grow by 15% this year to $552 million, followed by $642 million next year.
The company’s earnings will also return to growth, with analysts expecting the quarterly EPS to move from 34 cents to 49 cents.
Analysts are optimistic about OPRA stock
Analysts are hopeful that the Opera share price will continue rising. Those at Piper Sandler, TD Cowen, Lake Street, and Goldman Sachs have a buy rating fo the stock. As a result, the average Opera stock price forecast by analysts is $34, higher than the current $17.98.
Opera is also an undervalued company since it has a solid balance sheet and room to grow its business. It has over $106 million in cash and equivalents and no debt.
Opera has several risks ahead. The most notable one is that it makes most of its money from Google. Companies that depend on one or a few customers are always at a risk if the company decides to cut it off.
However, with Opera’s users growing, it is unlikely that Google would want to do that. Also, a decision by Google to cut it off would offer an opportunity for Microsoft to ink a similar deal.
Opera stock price analysis
OPRA stock chart by TradingView
The weekly chart shows that the OPRA stock price has rebounded after bottoming at $9.65 in October 23rd to a high of $22.52. This rebound was in line with our recent OPRA stock forecast.
It formed an ascending channel and has remained above the 50-week Exponential Moving Averages (EMA).
This channel closely resembles a rising wedge since the two lines are converging. This convergence has a long way to go, meaning that the stock may rebound, and possibly retest the upper side.
A complete Opera stock price breakout will be confirmed if it moves above the upper side of the wedge at $22.52. That move may take it to the all-time high of $26.51.
On the other hand, a drop below the lower side of the wedge will point to more downside to the 50% retracement level at $14.95.
The post Opera stock price analysis: more upside, but a risky pattern forms appeared first on Invezz
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