OPRA Stock Plummets 15% in 3 Months: Should You Stay Away Now?

Opera Limited’s OPRA shares have lost 15.3% in the past 3 months, underperforming the Zacks Computer and Technology sector’s decline of 6% and the Internet–Content industry’s rise of 0.8%.

OPRA is facing challenges due to mounting cost pressures, with first-quarter operating expenses jumping 47% year over year. A steep 49% decline in the operating cash flow on a year-over-year basis raises concerns regarding near-term liquidity and capital efficiency.

Opera has underperformed its peers, such as Perion Network PERI, Intellinetics INLX and Yelp YELP. Over the same period, shares of Perion Network, Intellinetics and Yelp have gained 16.9%, 12.1% and 9.6%, respectively.

MAU Stagnation Poses Risks for Opera

OPRA’s management highlighted ongoing challenges in sustaining its monthly active user (MAU) base, which appears to have stagnated near the 300-million mark. This lack of meaningful user growth signals potential saturation in key markets.

Opera Limited Sponsored ADR Price and Consensus

Opera Limited Sponsored ADR price-consensus-chart | Opera Limited Sponsored ADR Quote

Stagnation in MAU growth could have a significant impact on Opera's monetization strategies, especially in high-margin areas like advertising and search revenues, which rely heavily on user engagement.

While the company is emphasizing innovation through products like Opera Air and updates to Opera One and GX, the ability of these offerings to drive sustainable user growth is uncertain. To maintain a competitive position and long-term profitability, Opera must effectively address its user acquisition and retention challenges.

OPRA Hit by Surge in Operating Spending

Opera’s recent performance is increasingly clouded by surging expenses. Increased investments in personnel, infrastructure and product development have led to a noticeable rise in operating expenses. While top-line growth remains healthy, the expenditure is placing downward pressure on the operating margin and overall profitability.

In the first quarter of 2025, OPRA’s operating cash flow fell 49% from the prior year. This sharp drop raises concerns about its operational inefficiencies and may limit internal capital availability.

Conclusion

Opera faces notable headwinds, including rising operating expenses, a sharp increase in share-based compensation and challenges in growing its user base. The decline in the operating cash flow adds to concerns about funding future initiatives. Success in driving user growth and controlling costs will be essential for Opera to stabilize its financial position and build long-term value for shareholders.

OPRA currently has a Zacks Rank #5 (Strong Sell), which implies that investors may consider staying away from the stock for the time being.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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