Is Opera’s Recent Drop a Signal or a Chance After Five-Year 139% Rally?

If you are looking at Opera stock and wondering whether to jump in, sit tight. There is a lot to unpack. The stock price has been on something of a rollercoaster lately, pulling back 12.3% over the past week but still positive by 0.7% for the last month. If you zoom out, though, Opera’s story becomes much clearer. Over the past five years, shareholders are sitting on gains of 139.1%, and the return over the last three years is a truly impressive 416.3%. Even with a year-to-date dip of 6.5%, Opera’s 12-month return stands at a solid 29.0%.

These swings are not just random noise. Often, they tie back to shifting market sentiment around growth stocks and evolving competitive landscapes in the tech world. As global investors weigh the risks and potential in internet companies, Opera continues to catch attention for both volatility and long-term growth.

Where does valuation fit into this story? That is the real question. According to our latest analysis, Opera knocks it out of the park, scoring a perfect 6 out of 6 on undervaluation checks. That signals that, across a range of methods, Opera looks inexpensive based on current metrics. However, as you will see, the most interesting insights come not just from classic valuation formulas, but from looking deeper. Stay tuned as we break down each approach and explore an even more insightful way to understand Opera’s true value at the end of the article.

Why Opera is lagging behind its peers

Approach 1: Opera Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by forecasting its future cash flows and then discounting those amounts back to today's dollars. This approach gives investors a sense of what the business is truly worth, relying on real cash generated rather than just earnings multiples or sentiment.

For Opera, the most recent Free Cash Flow (FCF) reported stands at $86.1 Million. According to analyst forecasts, Opera's FCF is projected to grow steadily each year, with estimates rising to $200 Million by 2029. While only the next five years are based on direct analyst input, subsequent years are extrapolated using reasonable growth assumptions. This ensures that the cash flow projections reflect both concrete analysis and forward-looking models.

The DCF analysis produces an intrinsic value of $47.92 per share. When compared to Opera's current market price, this calculation reveals a substantial 62.6% discount. In other words, the DCF model suggests the stock is dramatically undervalued at current prices.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Opera.

Our Discounted Cash Flow (DCF) analysis suggests Opera is undervalued by 62.6%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Opera Price vs Earnings (PE)

For profitable companies like Opera, the price-to-earnings (PE) ratio is a foundational tool to assess valuation. It captures what investors are willing to pay today for a dollar of current earnings, making it especially relevant for mature technology businesses with positive earnings.

The level at which a PE ratio is considered high or low depends on several factors, including growth prospects and perceived risk. Rapidly growing or lower-risk companies tend to command higher PE multiples, while slower growth or increased risk typically leads to lower ratios. For Opera, the current PE stands at 19.93x, which is markedly below both the industry average PE of 36.08x and the peer average of 79.25x.

Simply Wall St’s proprietary Fair Ratio aims to improve on broad industry comparisons by incorporating Opera’s unique blend of earnings growth, profit margin, risk profile, industry context, and market capitalization. In Opera’s case, the Fair Ratio is 29.54x. This suggests the company should command a higher multiple than it currently does, based on its fundamentals and opportunities. Unlike generic comparisons, the Fair Ratio provides a more tailored view by recognizing both the strengths and potential challenges specific to Opera.

With a Fair Ratio of 29.54x versus the actual 19.93x, Opera appears to be undervalued on this metric, adding another point in favor of the stock’s current price being attractive for value-conscious investors.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Opera Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your personal story or perspective about a company, bringing together your own assumptions about future revenue, profit margins, risk, and how all of that should translate into a fair value.

On Simply Wall St's Community page, Narratives make it easy for every investor to define their view by linking the company’s business story directly to a financial forecast and fair value. This is something millions of users already use to guide smarter decisions. This tool makes the investment process more approachable by helping you bridge the gap between what you believe about a company and what the numbers say it is worth. It also updates automatically as new information such as news or earnings announcements become available.

With Narratives, you can see at a glance if your fair value is above or below the current price, helping you decide whether it's time to buy, hold, or sell. For Opera, for example, some investors see massive opportunity and set fair values as high as $33.0 per share, while others, more cautious about competition or risk, see fair value closer to $23.0.

Do you think there's more to the story for Opera? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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