eToro Stock Dips as Goldman Sachs Downgrade Weighs on Sentiment

eToro Group stock (NASDAQ: ETOR) is under pressure in pre-market trading following a downgrade from Goldman Sachs, impacting investor sentiment and overshadowing previous positive ratings. The downgrade adds to a series of recent analyst revisions, painting a mixed picture of the online trading platform's near-term prospects.

In pre-market trading, eToro's stock is trading lower by 1.79% at $35.04. This decline follows Goldman Sachs' decision to lower its rating on eToro from “Buy” to “Neutral,” simultaneously reducing the price target from $48 to $39. The firm's rationale centers on sales estimates through 2027 falling below the peer average of 8%, coupled with escalating competition in the European market from larger U.S. players, potentially driving up costs.

A Shifting Tide on Wall Street

The Goldman Sachs downgrade comes against the backdrop of reduced price targets on Wall Street. Throughout late 2025 and early 2026, several firms have adjusted their outlook on eToro. Jefferies, in August 2025, lowered its price target to $63 from $80, citing increased spending in marketing and research and development. Mizuho followed suit in October 2025, reducing its price target to $65 from $80 due to a softer take rate of $0.75 compared to a previous estimate of $0.94, although the firm did note solid growth in funded accounts. Needham also adjusted its price target downward in November 2025 to $68 from $76, influenced by cryptocurrency trading trends.

However, not all analyst actions have been negative. Susquehanna bucked the trend in November 2025, upgrading eToro's stock to “Positive” from “Neutral” and raising the price target to $55 from $50. This upgrade was driven by eToro's strong engagement in its “Social Trading” platform and the structural growth of retail investing in core markets, in addition to highlighting strong marketing return on investment.

eToro's first-quarter 2025 earnings revealed some underlying challenges. While the company reported earnings per share of 69 cents, beating estimates, this figure represented a 9% decrease compared to the same quarter of the previous year. Revenue increased by 11% to $3.75 billion, but adjusted EBITDA margin contracted to 37% from 43%, as total expenses rose to $3.68 billion from $3.31 billion. Marketing spend saw a significant surge, increasing by over 60% as the company ramped up promotional activities around its May IPO.

The consensus among analysts appears to be that while eToro possesses long-term growth potential, with reduced price targets remaining healthily above the current price action, the company faces immediate headwinds. Increased competition, rising expenses, and fluctuating market conditions, particularly in the cryptocurrency space, are placing pressure on eToro's profitability and market share.