eToro Group (NasdaqGS:ETOR) shares have moved up 3% over the past day, catching the attention of investors tracking recent momentum. Over the past month, however, the stock is still down 7%, underlining ongoing volatility in the sector.
See our latest analysis for eToro Group.
While eToro Group’s 1-day share price return of 3.2% has sparked renewed interest, it follows a much steeper loss of nearly 40% over the past quarter. This highlights that recent momentum remains fragile compared to the year’s persistent downward trend.
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With a steep drop from its recent highs and signs of potential value compared to analyst price targets, is eToro Group undervalued at these levels, or has the market already factored in any future rebound?
eToro Group is trading at a price-to-earnings (P/E) ratio of 17.5x, which is well above the peer average of 6.5x. At the last close price of $39.27, the market is asking investors to pay a significant premium relative to direct competitors.
The price-to-earnings ratio is one of the most commonly used measures to assess if a company’s stock is expensive or cheap versus its earnings. For a diversified financials firm like eToro, this ratio reflects how much growth, stability, and earnings quality investors expect from future performance.
At 17.5x, the P/E is notably higher than the sector’s typical 6.5x. This large gap signals that investors are either confident in eToro’s sustained growth trajectory or potentially overestimating its near-term prospects. Without a supporting fair ratio, this valuation could moderate as market expectations adjust.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-Earnings of 17.5x (OVERVALUED)
However, persistent annual revenue declines and a significant premium to price targets remain near-term risks that could challenge any quick turnaround for eToro shares.
Find out about the key risks to this eToro Group narrative.
While the price-to-earnings ratio shows eToro Group trading at a premium, our DCF model gives a different perspective. According to this approach, eToro’s shares are currently trading about 13% below our estimated fair value. Does the market see risks others are overlooking? Or could there be unrealized potential here?
Look into how the SWS DCF model arrives at its fair value.
