Why Opera's Cash Flow Mastery Could Be Your Tech Sector Lifeline

Imagine a company that's not only generating cash but also using it like a chess grandmaster—making bold moves today that set up wins years down the road. That's Opera right now. While Wall Street chases flashy AI stocks, I'm telling you: free cash flow (FCF) efficiency is the new king of valuation, and Opera's got the numbers to prove it. Let's dive in!

Why FCF is the New Black: Amazon vs. Xerox

Investors are finally waking up to a brutal truth: earnings per share (EPS) can lie. A company might boost EPS by borrowing cheaply or slashing R&D, but FCF strips away the fluff. It's cold, hard cash left after keeping the business running. Case in point:

• Amazon (AMZN) spent decades posting negative FCF while pouring cash into AWS and logistics. Critics called it wasteful—until those investments became gold mines.
• Xerox (XRX), meanwhile, tried to juice short-term FCF by cutting R&D and selling assets. Result? A tech dinosaur overtaken by digital rivals.

The lesson? FCF is a tool, not a trophy. You need to balance it with smart reinvestment. And that's exactly what Opera's doing.

Opera's FCF Story: High Yield, High Stakes

Let's get granular. Opera's trailing 12-month FCF is $78.1M, giving it a 4.57% FCF yield (vs. a pitiful 0.69% sector median). But here's the kicker:

The line chart should show a dip from 9% in 2020 to ~4.5% today—but note the 30.55% FCF growth in 2024 and its 38.52% 3-year CAGR.

Yes, the yield has dropped from its 2018 peak of 8.6%, but that's because Opera is reinvesting. They're plowing cash into AI (hello, Opera Neon browser!), buying back stock ($13M in 2023), and expanding into high-margin Western markets. The result? A 24% adjusted EBITDA margin in 2024—up 300 basis points from 2022.

The FCF ETF Play: How to Find the Next Opera

If you're not ready to bet on individual stocks, grab the Innovative High FCF Yield ETF (SFLO) or its sister fund (VFLO). These track companies balancing FCF with growth. Opera's already in the top 25% of its sector for FCF growth—so these ETFs are sniffing out the next winners.

But here's the catch: Avoid companies where FCF yield is rising because they're cutting investment. Think of a retailer slashing store openings to boost FCF—that's a warning.

The Bottom Line: Opera's Balancing Act

Opera isn't just a browser company anymore—it's a cash-generating AI lab. Its FCF yield is still twice the sector's, but the key is what it's doing with that cash:

• AI Innovation: Opera Neon's AI-powered browsing is a moonshot that could dominate in a $40B+ browser market.
• Shareholder Returns: Buybacks and dividends (if they start paying them) mean you're not just buying growth—you're getting paid to wait.

This isn't a get-rich-quick scheme. It's a patient, disciplined strategy. And in a market where 80% of companies underperform their FCF yield expectations (per GuruFocus), Opera's track record of growing FCF while reinvesting is rare.

Action Alert: If you're in tech, don't just chase AI hype. Own Opera (OPRA) or the SFLO ETF. These are the survivors when the music stops.

Investing involves risk, including loss of principal. Past performance does not guarantee future results. Consult your financial advisor before making investment decisions.