Why eToro Group Stock Rocketed 9% Higher on Tuesday
Key Points
One analyst felt compelled to upgrade his recommendation on the fintech.
For him, it's now a buy.
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eToro Group (NASDAQ: ETOR) was the subject of several analyst updates on Tuesday, and investors were clearly taken with the more bullish ones. That's because the stock raced to close over 9% higher on the day, easily trouncing the 0.2% increase of the benchmark S&P 500 index.
An upgrade lifted sentiment
By my count, four prognosticators weighed in with new takes on eToro. This was hardly surprising, as the fintech published its third-quarter earnings report Monday morning.
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Image source: Getty Images.
Of the quartet, the analysis that seemed to have the most impact on the stock was authored by Deutsche Bank's Brian Bedell. In the note, Bedell upgraded his eToro recommendation to buy from hold, in the process adding $1 per share to his price target for a new level of $45.
According to reports, the analyst considers the shares to be oversold, given their over-25% slide since the company's initial public offering (IPO) in May. This isn't justified by the clearly improved operational momentum it's showing, he wrote, or the Israel-based company's potential to capture significantly more business in the U.S. market.
Third-quarter triumph
Almost indisputably, eToro had a successful Q3. Its revenue more than doubled to $4.1 billion from the year-ago $1.6 billion. Not to be outdone, net income not according to generally accepted accounting principles (GAAP) flew 34% higher to more than $60 million, beating the average analyst estimate. This is a company that obviously has momentum on its side and is well worth watching.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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