eToro Group Ltd. (ETOR): A Bull Case Theory

We came across a bullish thesis on eToro Group Ltd. on Value investing subreddit by Superb-Food. In this article, we will summarize the bulls’ thesis on ETOR. eToro Group Ltd.'s share was trading at $41.27 as of September 30th. ETOR’s trailing and forward P/E were 18.32 and 15.29 respectively according to Yahoo Finance.

eToro, a platform widely recognized for its beginner-friendly trading app, has recently entered the public markets, surprising many who remember it as a go-to app for first-time traders since 2017. Despite its strong marketing appeal to novices, the platform is less ideal for long-term active traders. Currently, eToro’s stock trades significantly lower than past highs, yet a closer look at its financials suggests a much stronger underlying business. On an annual basis, revenue has surged 225% while gross profit rose 41%, reflecting both strong top-line growth and operational efficiency.

Total assets increased 48%, alongside a notable 235% rise in liabilities, primarily accounts payable, likely driven by aggressive marketing campaigns. The company’s cash flow profile is encouraging, with cash from operating activities up 140% and cash used in investing declining sharply, signaling targeted asset acquisitions and disciplined capital allocation.

Valuation metrics are attractive, with the price-to-earnings ratio remaining reasonable and notably more modest than peers like Robinhood, which many analysts and AI-driven models consider a strong buy. Market sentiment, however, does not yet reflect these fundamentals, offering a potential disconnect between current stock price and intrinsic value.

For investors, this divergence presents an intriguing opportunity, as eToro’s robust growth, improving profitability, strategic asset investments, and favorable valuation could drive significant upside if the market begins to recognize the company’s financial strength and long-term potential. Overall, eToro appears well-positioned for continued expansion, particularly as retail trading adoption grows globally, making it a compelling consideration for both equity and long-term strategic investors.

Previously we covered a bullish thesis on Robinhood Markets, Inc. (HOOD) by kumaramit0703 in March 2025, which highlighted its evolution from a commission-free trading app to a diversified fintech platform with strong user engagement and multiple revenue streams. The stock has appreciated by 234% since our coverage. The thesis still stands as HOOD’s growth initiatives remain strong. Superb-Food shares a similar perspective but emphasizes eToro’s rapid revenue growth and disciplined cash allocation.

EToro Group Ltd. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held ETOR at the end of the second quarter which was 0 in the previous quarter. While we acknowledge the potential of ETOR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.