Israeli online trading platform eToro (Nasdaq: ETOR) has been the biggest Israeli IPO of the year on Wall Street. On its first day of trading in May, the stock jumped sharply to give a market cap of $5.4 billion. But since then the company’s fortunes have faded. Over the past three weeks, the stock has already lost about 25% of its IPO value, so compared to its June peak, eToro's share price has fallen 43%.
The company, led by co-founder and CEO Yoni Assia, provides a platform for trading a variety of assets, including stocks, indices, cryptocurrencies and commodities. The Nasdaq flotation was completed at a company valuation of $4.4 billion, and it is currently trading at a market cap of $3.73 billion. Among the losers "on paper" from the stock's decline are Assia, the Barkat brothers and Yuval Rakavi's BRM fund, and Spark Capital.
There is no single clear reason for the negative trend. The declines seem to have been influenced, among other things, by second-quarter financial results, which the company published two weeks ago. In the second quarter eToro beat the analysts' estimates on net profit, but other metrics were mixed. For example, net contribution, a measure of its revenue from trading fees, was $210 million, down slightly from the previous quarter, and GAAP net profit was virtually unchanged from the same quarter last year.
Analysts see the share price rising 50%
After the financial report was published, several analysts cut their price target for the stock without changing their recommendations. According to "The Wall Street Journal," analysts are divided in their opinions about the stock - 8 positive and 8 neutral (and no negative), and their average price target is 48.5% higher than the current share price.
Investment bank Jefferies also cut its price target price eToro from $80 to $63 after the financial report was published, a price that still reflects a premium of 40.8% on the current price. Jefferies' recommendation remains "Buy", and analyst John Aiken explained at the time that he was lowering his net profit forecast for eToro for 2025-2026, among other things, due to higher spending on marketing and R&D. In his assessment, the higher-than-expected expenses stem from the acceleration of eToro's roadmap in the context of the company's products.
eToro, along with cryptocurrency company Circle, were cited as examples of positive cryptocurrency IPOs (Circle issued a stablecoin, and eToro allows cryptocurrency investment and also holds cryptocurrency assets on its balance sheet) that may pave the way for other companies.
Published by Globes, Israel business news - en.globes.co.il - on August 28, 2025.
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