ETOR — eToro Group Ltd.

eToro Group Ltd. (NASDAQ: ETOR) — deep-value analysis

Date: September 11, 2026 · Reference price: … (close 09/10/2026: …) · Market cap: … · Implied shares (A+B): 79.53 mil · Reporting and pricing currency: USD — no conversions needed, even though the issuer is registered in the British Virgin Islands with operations mostly in Israel.

Primary sources: FY2025 20-F filed 03/02/2026; 6-K with Q3 2025 results (11/10/2025), Q1 2026 (05/12/2026) and Q2 2026 (08/11/2026); TradeZero acquisition press release (08/11/2026); SEC XBRL companyfacts (CIK 0001493318); Schedule 13D/A from 09/04/2026; Forms 4 from 08/12, 08/28 and 09/09/2026; data-pack-ETOR-20260911.md; mc-ETOR-20260911.json; GBL tracker via query_tracker.py.

Method note on the mechanical triage that triggered this rerun. The task arrived because the falsifier operating_margin < 0.20 tripped for two consecutive quarters. The check shows that the falsifier was misspecified, not that the business deteriorated: eToro recognizes crypto on a GROSS basis (it acts as principal, not agent, under IFRS 15), so the “Total revenue and income” line contains … bil of crypto cost of revenue in a single quarter. Operating margin calculated on gross revenue is 4.2% in Q2 2026 and 4.0% in Q1 2026 — and has been below 20% in EVERY quarter of the company’s history, including record ones. The correct denominator is Net Contribution (total revenue minus crypto cost of revenue minus margin interest), and on that basis TTM operating margin is 34.0%, up from 2025. The full series is in chapter 4. For future triage, the metric to track at ETOR is adjusted EBITDA margin on net contribution, with a useful threshold around 30%, not operating margin on gross revenue.

Executive summary (1 page: thesis, estimated value, verdict)

eToro is a trading and investing platform with 4.28 million funded accounts across 75 countries, earning commission on trade spreads (stocks, commodities, currencies, crypto), interest on users’ uninvested cash and on margin positions, and currency conversion and interchange fees through eToro Money. As of September 11, 2026 the stock trades at … i.e. …x trailing-twelve-month GAAP earnings (… per share), 1.80x book value (… per share) and — most relevant — 4.4x TTM adjusted EBITDA (…) on an enterprise value of only …, because gross cash of … (cash … plus short-term investments …) covers 51% of the market cap, and financial debt is ZERO: the … of “total debt” on any screener is exclusively IFRS 16 lease obligations.

The thesis has three legs. First: the crypto collapse is already consumed, not incipient. Crypto net contribution fell from … (Q3 2025) to … (Q2 2026), a … drop in three quarters, and yet TOTAL net contribution grew 9.4% year-over-year in Q2 2026 and 18.8% in Q1 2026, because the stocks/commodities/currencies segment rose from … to … (… over the same three quarters), and eToro Money grew ~25% year-over-year. Crypto’s share of net contribution fell from 27.5% (Q3 2025) to 5.5% (Q2 2026): the most volatile component has become nearly irrelevant, and the rest of the business absorbed the shock without losing margin year-over-year (adjusted EBITDA on net contribution: 34.1% in Q2 2026 versus 34.3% in Q2 2025). Second: the business generates real, externally verified cash. TTM adjusted FCFE is … — an 11.7% yield on market cap and 18.1% on enterprise value — and the figure holds up against a market cross-check: the EV/FCF ratio of 5.67x published by data providers implies ~…, a 2.7% gap from my bridge. Third: the price pays for a structural decline that doesn’t show up in the numbers. But the market isn’t wrong for no reason, and three facts partly vindicate it: the interest contribution (22.3% of total) is flat year-over-year and exposed to monetary easing (… annual net profit per 100 bps, sensitivity disclosed in the 20-F, i.e. ~10% of profit); July 2026 KPIs show assets under administration … year-over-year and value invested per trade …; and Spark Capital, the largest shareholder with 10.65% of Class A in February, fully distributed its stake on August 12, 2026, reaching ZERO.

Estimated value: range …–… per share, with a central zone of …–… Five triangulated models produce margins of safety from … (DCF bear: rates −200 bps, crypto halved, tax normalization) to … (DCF bull: TradeZero integrated, acceleration), with a model median of …; the Monte Carlo simulation over 20,000 scenarios gives a median of … and a …% probability of undervaluation. The most informative point of the triangulation is neither the extreme nor the median, but the no-growth reproduction value: EPV Greenwald, with interest normalized down 150 bps and the effective tax rate reset to 20%, gives … — meaning the current price pays exactly zero growth plus an already-consumed rate cut. At … growth comes free.

Verdict: BUY, medium-sized position, with an explicit analytical stop. The asymmetry is favorable (downside quantified at … in the bad scenario, upside … in the base case), the balance sheet eliminates ruin risk (no financial debt, … bil cash, surplus regulatory capital — eToro Europe held … against a … requirement), and management returned … through buybacks in eight months, reducing weighted average basic shares by 5.8% over two quarters. Analytical stop: if in Q3 2026 (reported November 9) net contribution declines year-over-year AND operating margin on net contribution falls below 28% (Q2 2026 was 28.9%), the “offsetting mix” thesis is falsified and the position closes. Why the position is medium and not large: the … buyback authorization was exhausted as of June 30, 2026, so the buyer that absorbed ~… of supply in a single half disappears exactly during the period when pre-IPO funds are still distributing.