TipRanks Smart Growth Portfolio #21: Surfing for Upside
Dear Investors,
Welcome to the 21st edition of the Smart Growth Portfolio and Newsletter.
1
1
Portfolio News
❖ Enova International (ENVA) posted its Q2 2025 results, opening the Smart Growth Portfolio’s earnings season. The fintech company once again beat EPS expectations, extending its streak to seven straight quarters. ENVA posted non‑GAAP EPS of $3.23, well above the $2.98 consensus, up 46% year‑over‑year. The EPS surge was driven by robust origination growth – especially in small‑business lending – and by sustained credit quality. SMB revenue jumped 30% YoY to a record $326 million, while consumer revenue rose 17%.
Total revenue climbed 22% YoY to $764 million, topping both guidance and analyst estimates. Growth was driven by a 20% increase in combined loan and finance receivables balances. Net revenue margin held steady at 58%. Enova achieved more than 20% YoY growth in revenue, originations and adjusted EPS for the fifth straight quarter. Adjusted EBITDA rose to $203 million, up 25% from Q2 2024. The company also repurchased $54 million of stock during the quarter.
For the third quarter, ENVA expects revenue to grow at least 15% YoY, with a net revenue margin of 55-60%. Adjusted EPS is projected to rise 20-25%. For 2025 overall, the company forecasts roughly 20% revenue growth and around 30% adjusted EPS growth.
In addition, Enova announced key planned senior leadership changes, with David Fisher, Enova’s Chairman and CEO, set to move to the role of Executive Chairman of the Board, and current CFO Steve Cunningham to succeed him as CEO on January 1, 2026. While these changes may have weighed on investor sentiment due to perceived uncertainty, analysts remain positive on ENVA. Following the earnings report, TD Cowen reaffirmed its “Buy” rating and raised the price target to $137 from $134, citing Enova’s strong financial performance and resilient business model.
❖ Portfolio companies reporting in the next seven days are Alkami Technology (ALKT), Clearwater Analytics Holdings (CWAN), Itron (ITRI), and Innodata (INOD) – with the rest scheduled to report in August.
❖ Micron (MU) shares fell after Hedgeye, a prominent yet controversial independent research firm, added the stock to its short list and urged investors to lock in profits following a strong rally. This move coincides with jitters across semiconductor stocks amid renewed speculation that the Trump administration could impose tariffs on semiconductors as early as the end of July. Despite these pressures, Wall Street remains upbeat on Micron, with 22 of 25 analysts rating it a “Buy” and the remaining three at “Hold.”
1
1
Portfolio Updates
❖ ❖ ❖ After monitoring Cellebrite DI (CLBT) under review, we have decided to remove it from the Smart Growth Portfolio.
Cellebrite DI provides digital intelligence solutions that assist law enforcement, enterprises, and government agencies in analyzing and managing digital evidence. By leveraging advanced AI and forensic tools, it improves data access, compliance, and investigative efficiency.
Wall Street currently rates CLBT a “Strong Buy,” with an average price target that implies an upside of over 55% from current levels. Deutsche Bank recently included Cellebrite in its “Fresh Money Quarterly” list, naming it one of its top sector picks for Q3. While the bank noted CLBT’s year-to-date underperformance, it maintained a constructive stance, citing a solid and unchanged long-term opportunity in digital investigations and intelligence software.
Media coverage on CLBT remains limited, but the available news has been predominantly positive. The company’s acquisition of Corellium expands its total addressable market across public and private sectors. It also appointed a new CFO – a seasoned executive with a proven track record of scaling growth and improving profitability. Additionally, Cellebrite expanded its partnership with the National Center for Missing and Exploited Children (NCMEC) and secured FedRAMP sponsorship from the U.S. Department of Justice.
However, despite these bullish signals, the stock remains under pressure – down over 30% year-to-date. CLBT initially followed the broader rebound in small-cap growth stocks from April lows but diverged from that trend in mid-May after weaker-than-expected Q1 results. The stock has struggled to recover since, even amid favorable market conditions, as investors remain skeptical about the prospects for expanded U.S. Federal spending in Cellebrite’s core verticals.
We kept CLBT under careful watch, expecting sentiment to align with its strong long-term fundamentals. But with growing uncertainty around federal budget priorities and slowing revenue growth ahead, we no longer see a clear catalyst to reverse the stock’s trajectory. The longer CLBT trades lower, the harder it becomes to break that trend.
We’re exiting the position and earmarking the capital for higher-conviction ideas, which we plan to deploy after reviewing upcoming earnings reports.
1
1
Under Review
❖ We are keeping Alkami Technology (ALKT) under review due to softening analyst sentiment and negative market perception of macro-exposed fintech stocks.
Over the past quarter, the average 12-month price target has declined – with Needham, Lake Street, and JPMorgan all lowering their targets in the past two months alone. While no rating downgrades have emerged, there have been no upgrades since March, and the tone from Wall Street has grown more cautious.
However, these comments aren’t company-specific – rather, they reflect near-term headwinds facing fintech firms tied to the economy’s health. That divergence is evident in the group’s performance over the past couple of months: while investing, asset management, and trading-related stocks outperformed, those focused on SMBs, merchants, payments, and community banks have generally lagged.
Alkami’s exposure to regional banks and credit unions leaves it vulnerable to macroeconomic headwinds. Still, despite the macro uncertainty, the company reported solid Q1 2025 results – with strong revenue growth and continued improvement in adjusted EBITDA, gross margins, and narrowing GAAP net losses. However, ALKT slightly missed on non-GAAP EPS versus consensus and continues to struggle with cash flow consistency.
Alkami continues to prioritize reinvestment for growth rather than immediate profitability. This strategy supports long-term growth but pressures short-term returns. While small caps and growth strategies have seen some rebound recently, the positive sentiment doesn’t apply across the board at the moment due to continued high volatility and elevated uncertainty. As a result, investors lean toward profitable or cash-generative tech names, causing “growth at all costs” strategies like Alkami’s to fall out of favor.
That said, we are not rushing for the exit. Alkami’s position at the intersection of cloud banking, AI, and client personalization still offers strategic upside. The recent acquisition of MANTL strengthens its onboarding suite, and integration has proven much smoother than previously expected. In fact, Alkami – through MANTL – recently became the first fintech to integrate Plaid Layer for regional banks, enhancing its competitive stance against traditional providers and fintech challengers alike.
While we believe in Alkami’s long-term potential, we are mindful of the sell-off that could make it harder for the stock to regain momentum, even with sound fundamentals. We’ll continue monitoring ALKT’s news and stock performance until we see a catalyst that could shift our view – or until the company’s next earnings report on July 30. For now, Alkami remains in the Smart Growth Portfolio – but under active review.
1
❖ We are keeping Clearwater Analytics (CWAN) under review as the stock navigates short-term volatility tied to its ambitious acquisition strategy.
While CWAN has declined roughly 20% year-to-date, this appears to stem more from investor anxiety over integration challenges than from any fundamental deterioration. In 2025, Clearwater announced a transformative wave of M&A, acquiring Enfusion, Beacon, and BISTRO to build a unified front-to-back investment operations platform. These deals are ambitious and will reshape the business, but they also introduce complexity: Clearwater must integrate disparate technologies, cultures, and clients. Additionally, the acquisitions were financed with stock and debt, resulting in dilution and a more leveraged balance sheet – factors that are weighing down near-term sentiment amid elevated interest rates.
However, analysts remain optimistic, overwhelmingly assigning CWAN a “Buy” rating. There have been no downgrades in the past two months; on the contrary, Piper Sandler initiated coverage with a “Buy” in late June. Although Oppenheimer slightly lowered its Street-high price target, it now matches Morgan Stanley’s and implies an upside of ~63% from current levels. Morgan Stanley reaffirmed its “Buy” rating and $36 price target on July 16.
Meanwhile, CWAN’s business momentum remains positive, tilting our sentiment toward continuing to hold the stock in the Portfolio. Two weeks ago, Clearwater announced that Versicherungskammer Group – Germany’s largest public insurer – selected its platform to modernize middle-, back-office, and risk operations following a rigorous review. This high-profile win validates Clearwater’s strategy and demonstrates its ability to deliver an integrated, cloud-native solution leveraging its recent acquisitions.
Moreover, on July 9, Clearwater announced a strategic partnership with Bloomberg, incorporating CWAN’s accounting platform into Bloomberg’s enterprise investment solutions to create a comprehensive offering for asset owners and managers. This is a major milestone, strengthening Clearwater’s competitive position against larger full-stack providers and enhancing its value proposition as an open, interoperable platform built on best-of-breed partnerships. Through this collaboration with Bloomberg’s global institutional footprint, CWAN gains access to an expanded client base – potentially accelerating client acquisition and driving earnings growth beyond its current trajectory.
To support this momentum, Clearwater has bolstered its leadership team with experienced executives from top-tier firms. Barrie Mellin joins as Head of Insurance and Asset Owners, bringing over 20 years at BlackRock. Dennis Lee, with 30 years in senior roles at EY, PwC, and Deloitte, joins as Head of Insurance Solutions. Raheel Syed becomes Global Head of Professional Services, bringing 25 years of experience including as a Partner at EY and senior roles at Manulife and RBC.
While we remain mindful of potential integration shortfalls, we view Clearwater’s stock underperformance as temporary – though we are choosing to remain vigilant for now. CWAN is scheduled to release its Q2 earnings on July 30.
1
1
1
This Week’s Top Growth Pick: Opera (OPRA)
Opera Limited is a user-centric software company that reimagines how people experience the internet. Its suite of browsers and platforms blends speed, privacy, and personalization with deeply integrated AI and content features, serving users across mobile, desktop, and emerging markets. Opera builds tailored experiences for diverse audiences – from mainstream users to gamers – while embedding intelligent assistants, modular design, and innovative monetization. With a history of challenging conventions in browser technology, Opera positions itself at the intersection of utility, entertainment, and autonomy, enabling users to navigate and engage with the digital world on their own terms. As the web evolves, Opera continues to innovate at the edge of browsing, AI, and consumer engagement – turning everyday browsing into a smarter, more connected experience.
1
Tabbed Into Tomorrow
Founded in 1995, Opera Limited has evolved from a niche browser developer into a global software company at the forefront of browsing, AI, and digital engagement. Originally known for its lightweight, innovative browser, Opera was among the first to implement features such as tabbed browsing, integrated search, and built-in privacy tools, long before these became industry standards.
Over the past five years, Opera has accelerated its transformation through a mix of technological innovation, strategic investments, and diversification – fueling both growth and differentiation. In 2021, it launched Opera GX, the first browser designed specifically for gamers, which has grown into a key growth driver. In 2023, Opera unveiled Opera One, a complete redesign of its flagship browser with modular design and AI-powered workflows at its core.
Later that year, following the generative AI breakthrough, Opera became the first major browser to natively integrate an AI assistant – Aria – directly into its interface, blending large language model capabilities with live web access for contextual, real-time assistance. As the AI revolution gears up to eventually move into the agentic age, Opera introduced Neon – a fully agentic, AI-powered browser, currently in trial mode.
Opera also expanded into adjacent markets. In 2023 it introduced MiniPay, a stablecoin wallet built on the Celo blockchain, and in 2024 opened a green-powered AI data cluster to support its growing suite of AI-driven services. In early 2025, it launched Opera Air, a mindfulness-focused browser, and previewed its Browser Operator – an autonomous agent capable of executing user tasks locally in the browser, marking a bold step toward agentic computing.
Opera has also built revenue-generating collaborations with global leaders in search, advertising, and e-commerce. Its partnership with Google powers integrated search and shared monetization. On the advertising side, Opera works with platforms like AdSense, AdMob, Meta Audience Network, and Pangle, while also promoting brands such as Amazon, eBay, AliExpress, Temu, and Booking.com directly within its browsers – driving both user engagement and transaction revenue.
Through a deliberate strategy of internal innovation, partnerships with global leaders, and investments in AI and Web3, Opera has positioned itself as an agile, forward-thinking player with growing market share and a differentiated value proposition in a consolidated browser market.
1
Browsing for Growth
Opera’s business is centered on delivering innovative, user-centric browsing experiences while monetizing its large, engaged audience across multiple channels. Unlike traditional browsers that primarily rely on search revenue, Opera has diversified its model by building a resilient, multi-pronged monetization engine that leverages its differentiated products and user base.
The business revolves around two primary revenue streams: advertising and search, which together account for virtually all of Opera’s revenue. Advertising is the larger segment, contributing about 67% of revenue. This comes from Opera Ads, its proprietary advertising platform that serves high-value, privacy-conscious ads inside Opera’s owned inventory and through its audience extension offering. Opera Ads connects directly with global brands and programmatic platforms, selling premium formats like native ads, videos, interstitials, and sponsored content. By owning the browser surface and having first-party audience data, Opera achieves better targeting and higher margins than third-party-dependent networks.
Search revenue contributes the remaining ~33%, driven by longstanding partnerships with major search providers – chiefly Google – which pay Opera a share of revenue when users perform searches through the browser’s integrated bars and search pages. This revenue stream remains stable and profitable, and Opera has even embedded search entry points into its Aria AI assistant to capture evolving user behavior.
While Opera is not a SaaS business in the classic sense, its model does exhibit some recurring and predictable characteristics thanks to its loyal, active user base and multi-year agreements with partners. The company’s agility in addressing niche markets – such as gamers with Opera GX, emerging-market users with Opera Mini, and AI enthusiasts with Aria and Neon – helps to sustain and grow its audience.
Opera operates in the enormous and still-expanding digital advertising and search markets, collectively worth hundreds of billions of dollars annually. Within the global browser market, where Chrome and Safari dominate, Opera holds a modest but growing share – particularly in emerging markets and among high-value niches like gaming. The company has grown its Western market user base significantly over the past four years and boosted ARPU (average revenue per user) more than threefold, indicating real potential to take more share.
What sets Opera apart is its focus on underserved segments, its early integration of agentic AI, and its ownership of both distribution and monetization layers. This enables Opera to operate nimbly in a crowded space – turning its differentiated audience and privacy-conscious offerings into durable advantages in a massive, underpenetrated market.
Source: Opera Q1 2025 Investor presentation
1
Navigating the Agentic Era
The rise of AI-powered, agentic browsers represents both a threat and an opportunity for Opera. OpenAI – the leader in generative AI – has announced its own AI-native browser, expected to deliver deeply agentic, cloud-driven experiences that shift browsing from passive clicking to task-driven, conversational workflows. Competitors like Chrome (with Gemini), Edge (Copilot), Brave, Firefox, and Perplexity are also racing to reimagine the browser as a hub for summarizing content, filling forms, automating workflows, and reducing the need to open multiple pages – challenging the traditional engagement models that have long fueled Opera’s advertising and search revenues.
Opera, however, has not stood still. In March 2025, it launched Browser Operator, a local, on-device AI agent embedded into Opera One. This feature enables users to automate tasks – from booking and shopping to form-filling – with transparency and privacy, positioning Opera as a privacy-conscious alternative to fully cloud-based competitors. Aria, integrated into Opera Mini, brings AI summarization, research, and image generation capabilities to users in bandwidth-constrained markets, helping maintain engagement where others struggle to reach.
Building on these foundations, Opera introduced Neon – its most ambitious agentic product to date. Neon is a fully cloud-based, AI-powered browser designed for deeper automation and more complex workflows, currently available by waitlist. Together, these offerings reflect a deliberate two-tier strategy: Operator and Aria for privacy-first, mainstream audiences, and Neon for users seeking premium, fully agentic experiences.
The competitive landscape remains challenging. Larger rivals command vast resources, proprietary ecosystems, and enormous mindshare. AI’s impact on web traffic also threatens traditional ad-based monetization – as more answers are delivered directly in-browser, bypassing publishers and reducing pageviews. Opera’s ownership of the browser and its direct relationship with users, however, offers it levers to evolve its ad model, for example through native, contextual ads and commerce integrations that fit agentic workflows.
AI browsers are undergoing game-changing shifts, though they are still far from presenting existential threat to the regular ones. Opera is navigating this shift smartly by leaning into its strengths. With a local-first approach, its Operator runs directly on-device to enhance privacy and speed while maintaining user control. The company has crafted a deliberate two-tier strategy, offering Neon as a premium, cloud-based browser for deep automation, while positioning Opera One – enhanced by Aria and Operator – as the choice for mainstream users who value transparency and control.
Opera’s clear value proposition remains rooted in privacy, speed, and openness, reinforced by its early-mover status in the agentic browsing space. By innovating early and maintaining its agility, Opera has a real chance to capture a meaningful share of the agentic future – if it executes decisively in the next quarters.
Source: Opera Q1 2025 Investor presentation
1
Monetizing the Clicks
Opera delivered another strong quarter in Q1 2025, with results handily beating internal forecasts and analyst expectations. Revenue grew 40% year-over-year, accelerating from 29% in Q4 2024 and surpassing the guided range of 28-31%. Total revenue reached a record $143 million for the quarter, marking a robust start to the year. Growth was driven by sustained user expansion in key markets and increasing monetization per user – annualized ARPU grew 44% YoY, reflecting improvements in ad products, search integration, and e-commerce traction.
Segment trends remained healthy. Advertising revenue rose 3% YoY to $96 million, maintaining its share at roughly two-thirds of total revenue, while search revenue increased 8%. Notably, e-commerce, Opera’s fastest-growing vertical, more than doubled year-over-year, though it still represents a smaller portion of overall sales. These trends reinforce Opera’s ability to extract more value from its differentiated audience through better-targeted ads, commerce integrations, and premium partnerships.
Profitability also outperformed. Adjusted EBITDA came in at $32 million, exceeding the high end of prior guidance and yielding a margin of 23%, aided by operating leverage and ongoing efficiency gains. Non-GAAP diluted EPS rose to $0.27, up from $0.20 a year earlier – a 35% YoY increase – and ahead of analyst consensus estimates in the $0.23-0.24 range. GAAP diluted EPS was $0.20, and Opera has been consistently profitable on a GAAP basis since 2022, supported by revenue growth, high gross margins, and disciplined cost management.
Opera closed Q1 2025 with a strong balance sheet. Operating cash flow was positive and free cash flow comfortably covered investments, leaving the company with over $180 million in cash and equivalents, ample liquidity, and no material debt – providing runway to execute its strategy without external financing pressure.
Looking forward, Opera raised its full-year 2025 guidance to revenue of $567-582 million, implying ~20% YoY growth at the midpoint, and adjusted EBITDA of $135-140 million, reflecting continued margin expansion. This guidance exceeds analyst consensus at the time of the release and signals confidence despite macroeconomic uncertainties. Management expects ongoing strength in both advertising and e-commerce to sustain growth, with further ARPU improvements from agentic features like Browser Operator and Neon.
Overall, Opera’s financial story remains compelling: accelerating top-line growth, record ARPU, segment diversification, and steady profitability, all underpinned by a solid cash position and manageable competitive risks. With strong execution, a growing share of the browser and agentic markets, and expanding monetization levers, Opera appears well-positioned to scale profitably in the coming quarters.
Source: Opera Q1 2025 Investor presentation
1
Owning the Edge
Finding a suitable comparison group for Opera is a difficult task, since all other browsers are run by giants like Alphabet, Microsoft, and Apple, or by non-public entities – like Mozilla, which owns Firefox. However, Opera’s business model is almost entirely advertising- and search-driven – while its product is a browser, its revenue engine is audience monetization through search traffic, ads, and commerce – making it comparable to mid-cap ad-tech firms like Perion, Criteo, and PubMatic. Still, it must be noted that Opera has an inherent structural advantage over any other advertising and monetization firm through ownership of the distribution platform – the Opera browser. So, while these peers are relevant for financial and market comparisons, Opera’s vertical integration gives it more control over its destiny, i.e., ownership of both the browser and its monetization platform. That’s more akin to Google owning Chrome and Search – but at a much more modest scale and valuation.
Opera’s stock – ticker OPRA – has risen by over 44% in the past 12 months, far outpacing both its ad-tech peers and the browser-ruling giants. Despite that, Wall Street believes the stock’s potential isn’t even nearly realized. Analyst consensus views OPRA as a “Strong Buy,” with an average price target implying a potential upside of ~56%.
This upside looks compellingly undervalued. While OPRA is more expensive on many metrics than most of its comparable peers, that is natural – not only because the company has command over both the browser and monetization platform – but also because its revenue has grown and is expected to grow further much faster than the comps. Meanwhile, Opera’s multiples are considerably discounted versus Technology sector median ones, including trailing twelve month and forward Non-GAAP P/E, EV/Sales, and Price/Cash Flow, as well as TTM Price/Sales and forward EV/EBITDA. Importantly, OPRA’s forward PEG ratio of 0.77x indicates that the company’s strong past and expected growth is not yet priced in.
To top it all off, Opera – a high-growth, mid-cap tech play – is a dividend-paying company with a substantial yield of 4.6%. The company generates strong operating cash flow and has no meaningful debt, leaving it with surplus cash even after reinvesting in product, R&D, and occasional buybacks. After reaching GAAP profitability in 2022, Opera initiated dividends to reinforce its credibility, differentiate itself from less financially stable peers, and broaden its investor appeal – without compromising its ability to grow.
Altogether, Opera combines the agility of a mid-cap ad-tech company with the control of a platform owner – a rare combination in today’s market that positions it as a uniquely attractive opportunity.
1
To Sum It All Up
Opera combines innovative browser technology with AI-driven features to redefine how users engage with the web. Its platform blends search, content, and commerce into seamless, task-oriented experiences that appeal to both mainstream and niche audiences. Positioned between massive incumbents and smaller ad-tech players, Opera leverages its ownership of the browser to monetize more effectively while delivering privacy-conscious, highly personalized tools. Early leadership in agentic browsing, growing adoption of its AI assistants, and a deliberate focus on under-served segments reinforce its unique competitive position. For growth investors seeking exposure to the intersection of AI, digital monetization, and platform control, Opera offers a rare combination of agility, strategic differentiation, and significant runway in an evolving and expanding market.
1
1
Smart Growth Portfolio
|
1
1
Disclaimer
The information contained in this article represents the views and opinions of the writer only, and not the views or opinions of TipRanks or its affiliates and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy, or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices, or performance.
