Recent 25% pullback isn't enough to hurt long-term Opera (NASDAQ:OPRA) shareholders, they're still up 357% over 1 year
It's been a soft week for Opera Limited (NASDAQ:OPRA) shares, which are down 25%. But that doesn't change the fact that the returns over the last year have been very strong. We're very pleased to report the share price shot up 299% in that time. So it is important to view the recent reduction in price through that lense. Investors should be wondering whether the business itself has the fundamental value required to continue to drive gains.
Since the long term performance has been good but there's been a recent pullback of 25%, let's check if the fundamentals match the share price.
View our latest analysis for Opera
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Opera went from making a loss to reporting a profit, in the last year.
When a company is just on the edge of profitability it can be well worth considering other metrics in order to more precisely gauge growth (and therefore understand share price movements).
However the year on year revenue growth of 28% would help. We do see some companies suppress earnings in order to accelerate revenue growth.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We know that Opera has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on Opera
What About The Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between Opera's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Opera hasn't been paying dividends, but its TSR of 357% exceeds its share price return of 299%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.
A Different Perspective
It's nice to see that Opera shareholders have gained 357% (in total) over the last year. That gain actually surpasses the 35% TSR it generated (per year) over three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Opera is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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