We Expect Mobile, Privacy And E-Commerce Trends Will Empower Markets

Key Takeaways

• Strong growth in e-commerce and AI-driven ad revenues, complemented by privacy features, enhance monetization and attract both users and advertisers seeking performance and security.
  
• Innovation in products and disciplined cost control support premium market expansion, brand differentiation, and ongoing improvement in margins and profitability.
  
• Opera’s focus on high-value users and dependence on advertising and key partners exposes it to saturation, regulatory risk, and revenue concentration vulnerabilities.

Catalysts

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

• The rapid acceleration of advertising and e-commerce revenues, particularly with e-commerce advertising growing at over 100 percent annually and making up a growing portion of total sales, indicates Opera is capitalizing on the surge in global online commerce and increasing mobile adoption worldwide. This shift is expected to continue boosting Opera’s total revenue meaningfully over the next several years.
  
• Opera’s application of artificial intelligence to optimize user intent and deliver highly targeted, performance-based ads is driving higher monetization per user and making Opera an attractive partner for advertisers seeking measurable results. This should enhance ARPU and net margins as digital advertisers allocate more of their budgets to performance channels.
  
• The company’s early leadership in integrating advanced privacy and security features (such as VPNs, ad blocking, and agentic browsing through AI) is likely to engender stronger user loyalty and attract privacy-conscious users as regulation and consumer awareness rises. High retention and engagement should support stable or increasing revenue, even if total monthly active users fluctuate.
  
• Opera’s focus on product innovation, including newly launched browsers like Opera Air (targeted at higher-value Western markets) and the extension of their AI assistant Aria across all platforms, positions the company to capture incremental premium users and reinforce its brand differentiation. This has a positive impact on ARPU and supports sustained topline growth.
  
• Improved operational leverage driven by cost discipline—where operating expenses are rising more slowly than revenue due to platform unification and R&D investment—will translate into expanding EBITDA margins and higher earnings growth, offering a path to continued profitability even as the business scales aggressively.

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 17.4% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 16.1% today to 18.0% in 3 years time.
• The bullish analysts expect earnings to reach $151.6 million (and earnings per share of $1.64) by about July 2028, up from $84.2 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 24.6x on those 2028 earnings, up from 19.6x today. This future PE is lower than the current PE for the US Software industry at 41.8x.
• Analysts expect the number of shares outstanding to grow by 1.17% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.88%, as per the Simply Wall St company report.

Opera Future Earnings Per Share Growth

Risks

• Opera’s monthly active users base has drifted slightly lower and management explicitly states that growth efforts are focused on higher-ARPU users rather than growing the total user base; this strategy could limit future expansion opportunities if their high-value segment saturates, impacting long-term revenue and market share.
  
• The company’s advertising revenue, now two-thirds of topline, is seeing rapid expansion—particularly in e-commerce—but is exposed to volatility as market dynamics normalize and as performance-based advertising trends shift, potentially making revenue growth rates unsustainable in future years.
  
• Search revenue growth slowed to 8%, significantly below previous double-digit rates, and management highlighted that some high-intent monetization is being shifted out of traditional search; persistent search stagnation, amid dominance by mega-platforms, could weaken Opera’s recurring earnings power.
  
• The business remains heavily reliant on partnerships with large platforms (e.g., Google for search, large e-commerce platforms for advertising); any renegotiation or loss of these partners could bring top-line volatility and compress net margins due to revenue concentration risk.
  
• As privacy regulation tightens globally and large ecosystem players (such as Apple and Google) strengthen default app positions, Opera faces risk of losing both distribution and monetization opportunities, which could erode both its revenue base and earnings over the long term.

Valuation

• The assumed bullish price target for Opera is $32.26, which represents two standard deviations above the consensus price target of $25.93. 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 $844.3 million, earnings will come to $151.6 million, and it would be trading on a PE ratio of 24.6x, assuming you use a discount rate of 7.9%.
• Given the current share price of $18.44, the bullish analyst price target of $32.26 is 42.8% 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.