Investors in Opera (NASDAQ:OPRA) have sadly lost 58% over the past three years

Investing in stocks inevitably means buying into some poorly performing companies. But the long-term shareholders of Limited Opera (NASDAQ:OPRA) have had an unfortunate run for the past three years. They could therefore be moved by the 58% collapse in the share price, at this time. The most recent news is sobering, with the stock price having fallen 54% in one year. Moreover, it fell by 21% in about a quarter. It’s not much fun for the holders. But it could be linked to the weakness of the market, which is down 8.3% over the same period.

Now let’s look at the fundamentals of the business and see if the long-term shareholder return matches the performance of the underlying business.

Since Opera has not made a profit in the last twelve months, we will focus on revenue growth to get a quick overview of its business development. When a business is not making a profit, you generally expect to see good revenue growth. As you can imagine, rapid revenue growth, when sustained, often results in rapid profit growth.

Over the past three years, Opera has seen its revenue decline by 0.4% per year. This is generally not what investors want to see. The 17% compounded, three-year decline in share price is understandable given that the company has no earnings to brag about and revenues are trending in the wrong direction. Of course, the future will determine if today’s price is good. We generally don’t like owning businesses that lose money and can’t grow revenue. But any business is worth considering when it makes an initial profit.

You can see how earnings and income have changed over time in the image below (click on the graph to see exact values).

NasdaqGS: OPRA Earnings and Revenue Growth October 20, 2022

Take a closer look at Opera’s financial health with this free report on its balance sheet.

A different perspective

The last twelve months have not been great for Opera shares, which underperformed the market, costing holders 54%. Meanwhile, the broader market slipped around 24%, likely weighing on the stock. Shareholders have lost 17% annually over the past three years, so the share price decline has become more pronounced over the past year; a potential symptom of unresolved challenges. We would be hesitant to invest in a company with unresolved issues, although some investors will buy troubled stocks if they think the price is attractive enough. You can better understand Opera’s growth by checking out this more detailed historical chart profits, revenues and cash flow.

We’ll like Opera better if we see big insider buys. In the meantime, watch this free list of growing companies with significant and recent insider buying.

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Robert D. Coleman