Opera Likely To Report Lower Q2 Earnings; These Most Accurate Analysts Revise Forecasts Ahead Of Earnings Call

Opera Limited (OPRA) is set to release its Q2 financial results on August 19, with analysts forecasting a revenue increase to $137.44 million from $109.73 million year-over-year, despite an anticipated decline in EPS to 26 cents from 44 cents. This upcoming report follows better-than-expected Q1 results and a raised FY25 sales guidance, which recently saw OPRA shares gain 6%. Analyst sentiment remains predominantly positive, with several firms maintaining Buy or Overweight ratings and price targets ranging from $22.50 to $28.

Analysis

Opera Limited is approaching its second-quarter earnings release on August 19 with a mixed set of expectations from analysts. The company is projected to demonstrate significant top-line expansion, with revenue forecasted to reach $137.44 million, a substantial increase from $109.73 million in the year-ago period. This positive revenue outlook is supported by the company's strong first-quarter performance and its subsequent decision to raise FY25 sales guidance. However, profitability is expected to contract, with earnings per share anticipated to fall to 26 cents from 44 cents year-over-year. Despite the earnings compression, analyst sentiment remains largely positive, evidenced by multiple "Buy" and "Overweight" ratings from high-accuracy analysts. Notably, while Goldman Sachs maintained its "Buy" rating, it recently cut its price target to $22.50, suggesting a recalibration of valuation expectations, whereas other price targets ranging up to $28 are from late 2024. The stock's recent 6% gain to $16.32 indicates investor optimism heading into the report, likely driven by the strong revenue growth narrative.

Key Decisions for Investors

• Investors should focus on the upcoming August 19 earnings report, specifically whether the company's guidance clarifies the drivers behind the expected EPS decline despite strong revenue growth.
• Given the conflicting signals of rising revenue and falling EPS, it is critical to scrutinize management's commentary on operating margins and user monetization strategies to assess the sustainability of its business model.
• While analyst ratings are bullish, the recent price target reduction by Goldman Sachs from $26 to $22.50 should be considered a key data point, suggesting that investors should weigh the significant upside potential against a more tempered valuation outlook.