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On Thursday, Goldman Sachs analyst Eric Sheridan updated his outlook on Opera (NASDAQ: NASDAQ:OPRA), raising the price target from $23.00 to $26.00 while maintaining a Buy rating. Sheridan’s assessment followed Opera’s Q4’24 earnings report, which he noted showcased solid revenue momentum that is expected to continue into 2025. According to InvestingPro data, Opera’s strong financial health score of 3.47 ("GREAT") and impressive revenue growth of 17.82% support this optimistic outlook. The company currently trades at $18.56, with analysis suggesting it may be undervalued.
Sheridan highlighted Opera’s growing opportunity in digital advertising, particularly through Opera Ads, which has seen a recent influx of eCommerce advertisers. This development is anticipated to drive sustained top-line growth for the company. Additionally, Opera’s user growth is increasingly coming from higher Average Revenue Per User (ARPU) regions and verticals, including the United States, Western Europe, and the gaming sector. Want deeper insights? InvestingPro subscribers have access to 10+ additional exclusive ProTips and comprehensive financial analysis for Opera and 1,400+ other stocks.
The analyst pointed out that Opera is poised to benefit from competitive dynamics shaped by regulatory changes. Furthermore, the company’s commitment to balancing profitable growth with ongoing investments is seen as a strategy to capitalize on what management perceives as a significant long-term opportunity.
Sheridan expressed confidence in Opera’s prospects, citing the company’s leverage to long-term secular trends in digital advertising. He also mentioned the positive effects of geographic and product mix shifts on the company’s potential for sustained double-digit percentage growth over the coming years. The raised 12-month price target to $26 reflects this optimistic outlook for Opera’s financial performance.
In other recent news, Opera Limited reported fourth-quarter earnings that surpassed analyst expectations, highlighting strong financial performance. The company announced adjusted earnings per share of $0.28, exceeding the consensus estimate of $0.25. Revenue for the quarter reached $145.83 million, beating projections of $137.66 million and marking a 29% year-over-year increase. Opera’s advertising revenue, which makes up a significant portion of its total revenue, grew 38% year-over-year to $93.3 million, while search revenue increased by 17% to $52.3 million. Looking forward, Opera has forecasted first-quarter 2025 revenue between $130 million and $133 million, surpassing the consensus estimate of $121.4 million. For the full year 2025, the company expects revenue to range from $555 million to $570 million, exceeding analyst estimates of $547.1 million. Opera’s adjusted EBITDA rose 19% year-over-year to $33 million in the fourth quarter, representing a 23% margin. Additionally, the company declared a semi-annual dividend of $0.40 per share, which was paid in January. These recent developments reflect Opera’s continued growth and optimistic outlook for the coming year.
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