eToro Isn’t Feeling the Crypto Love. Should You Buy the Dip in ETOR Stock?

Shares of eToro Group (ETOR) pulled back following the company’s first earnings report as a publicly traded firm. The Tel Aviv-based trading and investing platform went public in May at a $4.2 billion valuation, only to see its stock slide 8% post-earnings, leaving its market cap closer to $4 billion. Investors appear cautious despite solid fundamentals, including a 54% year-over-year (YOY) jump in assets under administration (AUA) to $17.5 billion and steady growth in funded accounts.

The reaction comes at a time when crypto markets remain volatile, even as trading platforms like eToro post strong activity. Crypto revenue rose to $1.9 billion in Q2, up roughly $300 million YOY, highlighting the company’s exposure to digital assets. With the stock now trading at the lower end of its 52-week range, the question for investors is whether this dip represents a buying opportunity.

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About eToro Stock

Established in 2007, eToro runs a multi-asset investment platform across equities, ETFs, cryptocurrencies, and wealth solutions. Based in Tel Aviv, it has an expanding presence across the world, including a new base in Singapore. eToro provides services to more than 3.6 million funded accounts. eToro's market capitalization stands at close to $4 billion since it issued its IPO earlier in the year.

ETOR stock has ranged from $46.03 to $79.96 since its debut, and the stock most recently closed at $48.14. It’s a sharp fall from the $6 billion market capitalization it touched in its first-day trade, and the stock is off close to 17% just in the last week. As a point of comparison, the S&P 500 Index (SPY) is higher by roughly 25% over the last year, a reflection of ETOR’s underperformance against the general market.

On a valuation basis, eToro commands a forward price-earnings (P/E) ratio of 21.34 and a price-sales ratio of 0.31. As the P/E seems reasonable for a growth fintech, the razor-thin profit margin of 1.53% and the absence of a trailing P/E do make me question the durability of earnings. The price-to-sales (P/S) ratio, though, is very low, which in itself indicates the doubt the market may have regarding its longer-term growth profile if it can continue scaling its profit profile. eToro doesn't pay a dividend at this time, and based on its priority for reinvestment in growth, income investors shouldn't look for it in the near term.

Story Continues## eToro Beats on Earnings

In Q2 2025, eToro's adjusted net income was $54.2 million, compared with $44.2 million in the previous year. Adjusted EBITDA increased 31% YOY to $72 million, mainly due to increased revenue and controlled costs. Net contribution increased 26% to $210 million, underpinned by higher trading activity across asset classes.

Management emphasized product innovation as a key driver, citing the launch of 24/5 U.S. equity trading, expanded crypto coverage, and new tokenization initiatives for stocks, ETFs, and futures. The company also rolled out AI-powered Smart Portfolios and “Tori,” its in-platform AI analyst. These developments aim to deepen engagement and create differentiation from peers.

Direction for the rest of 2025 is a vote of confidence, led off by CEO Yoni Assia in terms of growth in long-duration portfolios through a partnership with Franklin Templeton (BEN), moves into French savings products, and scaling in Asia from its Singapore headquarters. Nonetheless, GAAP net income dipped slightly year-over-year because of IPO-related expenses, a reminder of near-term execution risks.

What Do Analysts Expect for ETOR Stock?

Wall Street’s sentiment towards eToro is still positive, and analysts have a “Moderate Buy” rating consensus. Its average target price stands at $68.53, suggesting a 42% upside from current values. Estimates vary significantly, from a bottom of $53 to a top of $85, reflecting skepticism about the sustainability of crypto-led growth. Management success in its tokenization and AI roadmap while increasing profit margins provides grounds for substantial upside from current lows, according to analysts. Investors willing to make a contrarian bet in the face of a resurgence in digital asset interest and fintech innovation development can look at ETOR stock in the meantime.

 *On the date of publication, Yiannis Zourmpanos did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com* 

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