Opera Limited projects Q2 EPS to fall to 26 cents

Summary

Opera Limited (OPRA) is expected to report lower Q2 earnings of 26 cents per share, down from 44 cents a year ago. The projected revenue is $137.44 million. Analysts have revised their forecasts; Goldman Sachs maintains a buy rating but lowers the price target from $26 to $22.5. Piper Sandler initiated coverage with an overweight rating at a $25 target. TD Cowen and B. Riley Securities also maintain buy ratings with adjusted price targets. Opera shares rose 6% to $16.32 recently. Benzinga

Impact Analysis

1. Business Overview Analysis:

• Opera Limited is a global browser developer and leading internet consumer brand. Opera’s core business involves developing internet browsers and generating revenue through advertisements and partnerships associated with these products. prnewswire
• It holds a strong market position as a popular browser developer, though it faces competition from other major browser companies.
• Recent events: Opera’s earnings are anticipated to decrease, impacting investor sentiment. The company has experienced a mix of institutional investment changes, with some increasing and others reducing their holdings. Market Beat+ 2

2. Financial Statement Analysis:

• Income Statement: Opera reports expected Q2 earnings of 26 cents per share, down from 44 cents a year ago, indicating a decline in profitability. Benzinga
• Balance Sheet: Recent institutional investment activity shows mixed sentiment, with some firms increasing holdings significantly while others reduced theirs. Market Beat+ 2
• Cash Flow: Not explicitly detailed, but changes in institutional holdings could signal varying expectations about cash flow performance.
• Financial Ratios: A decline in EPS suggests reduced profitability which may affect ROE and operating margins adversely.

3. Valuation Assessment:

• Current stock price movements show a 6% increase to $16.32, suggesting some positive market reaction despite lowered earnings expectations. Benzinga
• Analyst ratings vary, with some maintaining optimistic price targets despite downward revisions, indicating potential confidence in Opera’s future strategic or operational improvements.

Opportunity/Risk Analysis: Risks include declining earnings and varying investor confidence, while opportunities might arise from strategic investments or product developments that can bolster long-term growth.