eToro (ETOR) AI Stock Analysis

• Market Cap: $3.88B
• Dividend Yield: N/A
• Average Volume (3M): 915.30K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.03
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 1,414
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 0.31
• Shares Outstanding: 47,220,867
• 10 Day Avg. Volume: 918,837
• 30 Day Avg. Volume: 915,296
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $69.06
• Price Target Upside: 48.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 59 Neutral
• Price Target: $61.00 ▲(31.47% Upside)

The overall stock score for eToro is 59. The most significant factor is its strong financial performance, driven by impressive revenue and cash flow growth, as well as a strong balance sheet. However, technical analysis presents a neutral to slightly bearish outlook, and the lack of valuation metrics adds uncertainty, collectively leading to a moderate overall score.

Positive Factors

Financial Performance

Revenue and adjusted EBITDA both surpassed analyst estimates, indicating strong financial performance.

Product Expansion

EToro continued to expand its trade offering by launching tokenized U.S. stocks and broadening futures access.

Negative Factors

Crypto Trading

Crypto trades were lower than estimated likely due to market conditions, indicating a potential challenge.

Pre-tax Margin

The company delivered a ~4.7pp lower adjusted pre-tax margin.

eToro Business Overview & Revenue Model

Company Description

eToro is a leading social trading and multi-asset brokerage company that enables users to invest in a wide range of financial instruments including stocks, cryptocurrencies, commodities, indices, and ETFs. Founded in 2007, eToro operates a platform that combines traditional investment opportunities with innovative features such as social trading, where users can follow and mimic the trades of successful investors on the platform. Headquartered in Tel Aviv, Israel, eToro serves millions of users across multiple countries, making it a prominent player in the fintech sector.

How the Company Makes Money

eToro generates revenue primarily through the spreads on trades conducted on its platform, which is the difference between the buy and sell prices of an asset. Additionally, the company earns money from overnight fees, also known as rollover fees, charged on leveraged positions held overnight. eToro also benefits from its popular CopyTrader feature, where users can automatically copy the trades of others, as this increases trading volume and subsequently, potential earnings from spreads. Furthermore, eToro offers a subscription-based premium service known as eToro Club, which provides members with additional features and benefits. Partnerships with financial institutions and offering its platform to third-party brokers also contribute to eToro's revenue streams.

eToro Financial Statement Overview

Summary

eToro demonstrates robust financial performance with significant revenue growth of 225.78%, strong cash flow generation with a 138.95% increase in Free Cash Flow, and a stable balance sheet characterized by a low debt-to-equity ratio of 0.06 and high equity ratio of 69.86%. The company has improved its profitability margins, although further enhancement is possible, positioning it well for future growth.

Income Statement

eToro's income statement shows significant revenue growth, with a 225.78% increase from the previous year. The gross profit margin is moderate at 6.11%, but the net profit margin has improved to 1.52% from 0.39%, indicating better cost management. The EBIT margin of 1.95% and EBITDA margin of 2.33% suggest stable operational efficiency, although there's room for improvement in profitability.

Balance Sheet

The balance sheet reflects strong financial health with a low debt-to-equity ratio of 0.06 and a solid equity ratio of 69.86%, indicating a robust capital structure. The return on equity is a modest 23.11%, showing effective use of equity to generate profit. Overall, eToro maintains a stable and strong financial position.

Cash Flow

Cash flow analysis shows a strong Free Cash Flow growth of 138.95%, indicating excellent cash generation capability. The operating cash flow to net income ratio is 1.40, and the free cash flow to net income ratio is 1.38, both reflecting efficient cash conversion from profits. This highlights eToro's strong cash flow management and operational efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022
Income Statement
Total Revenue	5.84B	837.49M	3.88B	6.33B
Gross Profit	432.08M	12.52B	546.32M	584.80M
EBITDA	135.14M	293.62M	65.27M	-193.06M
Net Income	90.14M	192.38M	15.26M	-214.98M
Balance Sheet
Total Assets	1.75B	1.19B	800.16M	2.40B
Cash, Cash Equivalents and Short-Term Investments	1.19B	640.39M	388.33M	358.96M
Total Debt	51.25M	48.30M	36.46M	45.86M
Total Liabilities	431.19M	358.99M	202.60M	1.89B
Stockholders Equity	1.32B	832.38M	597.56M	515.43M
Cash Flow
Free Cash Flow	149.00M	266.21M	111.41M	343.61M
Operating Cash Flow	150.68M	268.58M	111.83M	346.98M
Investing Cash Flow	-137.17M	-68.53M	-1.42M	-24.92M
Financing Cash Flow	380.03M	-3.19M	-10.74M	-291.38M

eToro Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FUTU	80 Outperform	$29.44B	25.94	26.43%	―	66.97%	86.46%
HOOD	78 Outperform	$89.98B	51.43	23.54%	―	58.58%	508.72%
IBKR	78 Outperform	$26.79B	31.55	19.15%	0.83%	12.30%	20.76%
SOFI	72 Outperform	$30.35B	51.63	8.80%	―	22.60%	―
Sector *	68 Neutral	$17.80B	11.87	10.23%	3.74%	9.69%	1.18%
ETOR	59 Neutral	$3.88B	―		―	―	―
BULL	51 Neutral	$6.27B	93.34	-3.09%	―	―	―