Critical Survey: StepStone Group (NASDAQ:STEP) versus eToro Group (NASDAQ:ETOR)

StepStone Group (NASDAQ:STEP) and eToro Group (NASDAQ:ETOR) are both mid-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, risk and valuation.

Volatility & Risk

StepStone Group has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, eToro Group has a beta of 1.79, indicating that its stock price is 79% more volatile than the S&P 500.

Institutional and Insider Ownership

55.5% of StepStone Group shares are owned by institutional investors. 15.7% of StepStone Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for StepStone Group and eToro Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
StepStone Group	1	2	8	0	2.64
eToro Group	1	6	11	0	2.56

StepStone Group currently has a consensus price target of $67.44, indicating a potential upside of 52.94%. eToro Group has a consensus price target of $48.62, indicating a potential upside of 87.74%. Given eToro Group’s higher possible upside, analysts clearly believe eToro Group is more favorable than StepStone Group.

Earnings and Valuation

This table compares StepStone Group and eToro Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
StepStone Group	$1.99 billion	2.64	-$535.81 million	($7.72)	-5.71
eToro Group	$13.84 billion	0.16	$215.70 million	$2.66	9.74

eToro Group has higher revenue and earnings than StepStone Group. StepStone Group is trading at a lower price-to-earnings ratio than eToro Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares StepStone Group and eToro Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
StepStone Group	-30.53%	43.38%	4.40%
eToro Group	2.17%	20.26%	15.36%

Summary

eToro Group beats StepStone Group on 9 of the 14 factors compared between the two stocks.

About StepStone Group

StepStone Group Inc. is a private equity and venture capital firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in private debt, venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, buyout investments in mature and middle market companies. It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, power, utilities consumer staples, financials, telecommunication services, clean energy/renewables, transport, social, natural capital, infrastructure, corporate, real estate, credit and real asset. The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region. The firm invests between 5% and 40% in emerging markets. For fund of fund investment, it seeks to invest in private equity funds, venture capital funds, Special situation funds, Real estate funds, Infrastructure funds, mezzanine funds, and turnaround/distressed funds. It considers investments in both domestic and international funds. It also seeks to make co-investments and follow-on investments and considers partial interests in funds. StepStone Group Inc. was founded in 2007 and is based in New York, New York with additional offices across North America, South America, Europe, Australia and Asia.

About eToro Group

Our mission is to open the global markets, connect our users to leading investors and give them the tools they need to grow their knowledge and wealth. The global financial markets are widely recognized as one of the greatest paths to wealth creation, although they have historically been opaque and inaccessible to many. eToro was founded in 2007 with the vision of a world where everyone can trade and invest in a simple and transparent way. We set out to change the retail investing experience by pioneering social investing. We have built a collaborative investment community designed to provide users with the educational resources and tools they need to grow their knowledge and wealth. Users can view other investors’ portfolios and statistics, and interact with them to exchange ideas and discuss strategies. Our platform aims to combine the best elements of a social network with the ability to seamlessly trade and invest, all within a regulated, digital investment platform purpose-built for financial discourse and community. We believe that we provide what retail investors care about most: simple access to the assets they want to invest in, an intuitive and user-friendly mobile interface; and a trusted and transparent source for financial education, including the ability to draw on the knowledge and insights of other investors. On our platform, users can: . trade equities, commodities, currencies and cryptoassets, traded as the underlying asset or a derivative, depending on the asset class and on the user’s location; . learn, via our eToro Academy, which contains curated content to help investors, old and new, to learn and practice investing; . trade directly, invest in a Smart Portfolio, or replicate the investment strategy of another investor via our patented CopyTrader product; . utilize eToro Money, our complimentary money management offering, to make deposits, withdrawals and to trade local stocks in local currencies; . engage in our social offering, by consuming and creating content within a global community of passionate investors; . access valuable investment tools, including sophisticated charting and analysis and extended-hours trading; and . earn, through our Popular Investor program by engaging the community and growing the value of the users’ assets copying them (“Assets Under Copy”). As a company with a vision to disrupt the status quo, a passion for finance and technology is in our DNA. We have a strong track record of identifying and adopting key trends, and bringing the financial utility of these innovations to the benefit of our business and our users. We aim to continue to leverage new technologies to improve the eToro experience and further our mission. As of December 31, 2024, we had approximately 3.5 million Funded Accounts across our global footprint of 75 countries. Our success in attracting and retaining users and Funded Accounts stems from our flywheel powered by our breadth of products and services, our educational content, and our collaborative platform. New and experienced investors come to eToro to benefit from our global, multi-asset offering. Newer investors can access educational resources that empower them to invest, or they can copy the portfolios of other users to leverage the experience of others. More experienced investors benefit from our breadth of offering and our robust set of tools and analytics to support their trading needs. A number of our users become Popular Investors, engaging with the broader eToro investor community and monetizing the dollar value of users’ assets copying their portfolio. Together, new and experienced investors alike feed each other’s experience within a platform built on collaboration, transparency and trust. Over time, we expect to continue to grow our business by attracting and converting more of our users into Funded Accounts, deepening their engagement with our platform and community. For the years ended December 31, 2024 and December 31, 2023, our Net Contribution was $787 million and $557 million, respectively, an increase of $230 million, or 41%. Total Commission was $931 million and $639 million for the years ended December 31, 2024 and December 31, 2023, respectively, an increase of $292 million, or 46%. We believe there is power in shared knowledge and that we can become more successful by investing together. We are determined to lead the democratization of investing and are committed to breaking down the traditional barriers, promoting financial education and supporting the continued increase in retail investor participation in capital markets through our community-driven social investing platform. Our principal executive office is in Bnei Brak, Israel.