Accelerating Global Internet Penetration Will Expand Secure Fintech Ecosystems

Key Takeaways

• E-commerce and AI-driven browser innovation position Opera for outsized revenue growth, as new verticals and subscription models enhance monetization and margins.
  
• Rising privacy concerns, emerging markets focus, and MiniPay's fintech ecosystem fuel user growth, ARPU expansion, and long-term earnings diversification.
  
• Opera's growth is threatened by dominant tech giants, regulatory burdens, shifting device trends, partner concentration, and intensifying competition, all pressuring user growth and margins.

Catalysts

Provides mobile and PC web browsers and related products and services in Norway and internationally.

• Analysts broadly agree that Opera's e-commerce and high-intent advertising growth, especially in the U.S., is a key catalyst, but with e-commerce now representing nearly half of advertising and still "under-indexed," Opera's momentum and recurrent outperformance signal potential for revenue growth far above current expectations as new verticals like travel and fintech are layered on.
  
• Analyst consensus already views Opera's AI-driven browser innovation as margin accretive, yet management's explicit vision of browsers evolving into "operating systems" for AI agents-combined with the imminent launch of Opera Neon targeting an underserved billion-strong knowledge worker market-significantly amplifies the long-term upside to ARPU, overall monetization, and net margins as subscription and productivity models take hold.
  
• The accelerating global shift to lightweight, resource-efficient browsers amid rising internet penetration-particularly in emerging, mobile-first regions-places Opera's optimized multi-device suite and MiniPay wallet at the epicenter of a vast new user expansion cycle, driving both scale and engagement-led revenue growth.
  
• Rapidly growing concerns about privacy and security are making alternative browsers more attractive; Opera's well-established privacy features and ability to integrate secure, blockchain-backed fintech (such as MiniPay) uniquely position the company to capture premium users, further expanding ARPU and defending margins.
  
• Third-party app development within MiniPay is seeding a native, modular fintech ecosystem; as MiniPay's user base-already among the fastest growing globally-scales in Africa and beyond, Opera stands to generate recurring fee income independent of ad trends, diversifying and boosting both top-line revenue and long-term earnings resiliency.

Opera Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Opera compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Opera's revenue will grow by 16.6% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 14.5% today to 17.7% in 3 years time.
• The bullish analysts expect earnings to reach $155.9 million (and earnings per share of $1.68) by about August 2028, up from $80.6 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 23.8x on those 2028 earnings, up from 18.0x today. This future PE is lower than the current PE for the US Software industry at 36.5x.
• Analysts expect the number of shares outstanding to grow by 1.16% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.96%, as per the Simply Wall St company report.

Opera Future Earnings Per Share Growth

Risks

• The increasing dominance of global tech giants like Google, Apple, and Microsoft in digital ecosystems may limit Opera's ability to gain or retain meaningful browser market share, which could significantly slow user growth and constrain long-term revenue expansion.
  
• Rising global data privacy regulations such as GDPR and CCPA may increase Opera's compliance costs and limit the company's ability to monetize user data through advertising, putting downward pressure on net margins and reducing the effectiveness of its primary monetization model.
  
• Opera's dependence on search and advertising revenue from a small pool of partners, notably including Google and Yandex, exposes it to revenue instability should any key contracts be renegotiated unfavorably or if a major partner is lost, potentially causing sharp drops in both revenue and earnings.
  
• As device usage continues to shift towards closed mobile and embedded platforms dominated by default browsers, Opera faces a shrinking addressable market and potential declines in user engagement, posing long-term risks to its user base and overall earnings power.
  
• Intensifying competition from privacy-focused browsers, ad-blocking technology, and rapid innovation in AI-powered content aggregation could erode Opera's competitiveness, requiring sustained high investments in R&D and marketing, which may continue to pressure operating expenses and reduce future net margins.

Valuation

• The assumed bullish price target for Opera is $32.11, which represents two standard deviations above the consensus price target of $25.79. This valuation is based on what can be assumed as the expectations of Opera's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $33.0, and the most bearish reporting a price target of just $23.0.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $880.3 million, earnings will come to $155.9 million, and it would be trading on a PE ratio of 23.8x, assuming you use a discount rate of 8.0%.
  
• Given the current share price of $16.17, the bullish analyst price target of $32.11 is 49.6% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.