Interactive Brokers (IBKR) AI Stock Analysis

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Interactive Brokers

(NASDAQ:IBKR)

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Outperform 78 (OpenAI - 4o)

Rating:78Outperform

Price Target:

$71.00

▲(0.91% Upside)

Interactive Brokers' strong financial performance and positive earnings call are the most significant factors driving the stock score. The company's robust revenue growth, high profitability margins, and strategic advancements in trading platforms are key strengths. However, the high P/E ratio suggests potential overvaluation, and technical indicators show only mild bullish momentum. Challenges in the cryptocurrency space and interest rate sensitivity are notable risks.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for IBKR's services, enhancing its market position and supporting long-term expansion.

Client Growth

Significant client growth expands IBKR's user base, driving future revenue and solidifying its competitive advantage in the brokerage industry.

Cash Flow Generation

Strong cash flow generation enhances IBKR's financial flexibility, enabling strategic investments and sustaining operational stability.

Negative Factors

Cryptocurrency Market Share

Limited market share in the growing cryptocurrency sector may constrain IBKR's growth opportunities and competitive positioning in this emerging market.

Execution Cost Differences

Higher execution costs during overnight trading could impact profitability and deter clients, affecting IBKR's competitive edge in global markets.

S&P 400 Replacement

Removal from the S&P 400 may reduce visibility and attractiveness to index-focused investors, potentially impacting stock liquidity and investor perception.

Interactive Brokers (IBKR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$31.33B

Dividend Yield0.71%

Average Volume (3M)8.74M

Price to Earnings (P/E)36.9

Beta (1Y)1.32

Revenue Growth12.30%

EPS Growth20.76%

CountryUS

Employees3,027

SectorFinancial

Sector Strength70

IndustryInvestment - Banking & Investment Services

Share Statistics

EPS (TTM)0.51

Shares Outstanding445,246,980

10 Day Avg. Volume4,813,889

30 Day Avg. Volume8,739,378

Financial Highlights & Ratios

PEG Ratio1.13

Price to Book (P/B)4.46

Price to Sales (P/S)2.05

P/FCF Ratio2.20

Enterprise Value/Market Cap-0.87

Enterprise Value/Revenue-2.84

Enterprise Value/Gross Profit-3.19

Enterprise Value/Ebitda-3.27

Forecast

1Y Price Target

$73.00

Price Target Upside3.75% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering6

Interactive Brokers Business Overview & Revenue Model

Company DescriptionInteractive Brokers Group, Inc. operates as an automated electronic broker in the United States and internationally. The company engages in the execution, clearance, and settlement of trades in stocks, options, futures, foreign exchange instruments, bonds, mutual funds, exchange traded funds (ETFs), precious metals, and cryptocurrencies. It also offers custody and service accounts for hedge and mutual funds, ETFs, registered investment advisors, proprietary trading groups, introducing brokers, and individual investors. In addition, the company provides custody, prime brokerage, securities, and margin lending services. It serves institutional and individual customers through electronic exchanges and market centers. Interactive Brokers Group, Inc. was founded in 1977 and is headquartered in Greenwich, Connecticut.

How the Company Makes MoneyInteractive Brokers generates revenue through several key streams, primarily focusing on commissions and fees from trading activities. The company charges clients a small commission for each trade executed on its platform, which varies based on the type of security and the client's trading volume. Additionally, IBKR earns interest income from its clients' margin loans, utilizing the funds that clients borrow to trade on margin. The company's revenue model also includes custodial fees and payment for order flow, where it receives compensation for directing orders to specific market makers. Significant partnerships with financial institutions and market makers further enhance IBKR's revenue potential, allowing the company to leverage its technology and trading volume to optimize earnings.

Interactive Brokers Key Performance Indicators (KPIs)

Any

Total Customer Accounts

Total Customer Accounts
Tracks the total number of customer accounts, indicating the company’s market reach and growth in user base, which can drive future revenue.

Chart InsightsInteractive Brokers has experienced a robust and consistent increase in total customer accounts since 2019, with growth accelerating notably from 2023 onwards. This trend suggests strong market positioning and effective customer acquisition strategies. The absence of recent earnings call insights leaves the underlying drivers open to interpretation, but the sustained growth trajectory indicates potential for continued expansion and market share gains in the competitive brokerage industry.

Data provided by:

Main Street Data

Interactive Brokers Earnings Call Summary

Earnings Call Date:Jul 18, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Oct 16, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong financial performance with record-breaking metrics in various areas. Significant account growth and expansion in overnight trading reflect strategic successes. However, challenges in the cryptocurrency offering and concerns over tokenized equity products indicate areas for improvement. The company also faces potential risks from interest rate changes.

Q2-2025 Updates

Positive Updates

Record Financial Metrics

Quarterly commissions, net interest, total net revenue, and pretax income all reached record levels. Pretax income exceeded a billion dollars for the third consecutive quarter, and the pretax profit margin was an industry-leading 75%.

Significant Account Growth

The company added 250,000 net new accounts in the quarter, bringing the year-to-date total to over 528,000, surpassing the total for all of 2023.

Impressive Growth in Overnight Trading

Overnight trading volumes grew over 170% from the second quarter of 2024 to the second quarter of 2025, showcasing the platform's strength in global trading.

Strong Client Equity and Cash Balances

Client credit balances increased by 34% to a record $144 billion, and client equity rose 34% to $604 billion, outperforming the S&P's 11% growth for the quarter.

Enhanced Trading Platform

The company's ATS was enhanced to handle large spikes in volume by up to 20x, and smart order routing improvements were made to ensure best execution.

Negative Updates

Challenges in Cryptocurrency Offering

Despite having a lower-cost cryptocurrency offering, the company is disappointed in the market share gains in the crypto space. Asset transfer capabilities are being developed to address this.

Limited Impact of Tokenized Equity Products

There are concerns about tokenized equity products, which are seen as inferior to direct stock offerings and pose potential execution and liquidity issues.

Interest Rate Sensitivity

The company faces potential impacts from interest rate changes, with a 1% decrease in all benchmark rates potentially reducing annual net interest income by $335 million.

Company Guidance

During the Interactive Brokers Group's second quarter 2025 earnings call, several key metrics were highlighted, illustrating the company's strong performance and strategic advancements. The company reported a 27% increase in commission revenue compared to the previous year, reaching $516 million. The net interest income also set a quarterly record at $860 million, despite lower benchmark rates. Client trading volumes expanded across stocks, options, and futures, driven by a 170% growth in overnight trading volumes year-on-year. Interactive Brokers added 250,000 net new accounts in the quarter, bringing the year-to-date total to over 528,000, surpassing the total for all of 2023. Client credit balances rose by 34% to a record $144 billion, and client equity increased by 34% to $604 billion. The company's pretax income exceeded a billion dollars for the third consecutive quarter, with a pretax profit margin of 75%, an industry-leading figure. The company also noted significant enhancements to their trading platforms, including improved scalability and automation capabilities, alongside the introduction of new products like investment themes, which aim to streamline clients' investment processes.

Interactive Brokers Financial Statement Overview

Summary

Interactive Brokers exhibits a strong financial position with robust revenue growth, high profitability margins, and efficient cash flow generation. The low leverage and solid return on equity further enhance its financial stability. While the equity ratio suggests a high asset base, the overall financial health is commendable, positioning the company well for future growth.

Income Statement

Very Positive

Interactive Brokers has demonstrated strong revenue growth with a TTM revenue growth rate of 1.77%, indicating a positive trajectory. The company maintains high profitability margins, with a gross profit margin of 88.87% and an EBIT margin of 85.76% in the TTM period. The net profit margin is also healthy at 8.73%. These metrics reflect robust operational efficiency and profitability.

Balance Sheet

Positive

The balance sheet is strong with a very low debt-to-equity ratio of 0.0017 in the TTM period, indicating minimal leverage and financial risk. The return on equity is solid at 18.88%, showcasing effective use of equity to generate profits. However, the equity ratio is relatively low, suggesting a high asset base compared to equity.

Cash Flow

Very Positive

The cash flow statement shows impressive free cash flow growth of 57.62% in the TTM period, highlighting strong cash generation capabilities. The free cash flow to net income ratio is nearly 1, indicating efficient conversion of net income to cash. The operating cash flow to net income ratio is lower, suggesting room for improvement in operational cash efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.60B	9.32B	7.79B	4.19B	2.94B	2.42B
Gross Profit	8.53B	8.29B	6.87B	3.41B	2.31B	1.80B
EBITDA	8.33B	7.99B	6.60B	3.11B	2.09B	1.59B
Net Income	838.00M	755.00M	600.00M	380.00M	308.00M	195.00M
Balance Sheet
Total Assets	181.47B	150.14B	128.25B	115.14B	109.11B	95.68B
Cash, Cash Equivalents and Short-Term Investments	4.69B	3.63B	3.75B	3.44B	2.40B	4.29B
Total Debt	21.24B	16.26B	11.36B	8.96B	11.80B	9.96B
Total Liabilities	162.96B	133.54B	114.18B	103.53B	98.89B	86.68B
Stockholders Equity	4.83B	4.28B	3.58B	2.85B	2.40B	1.95B
Cash Flow
Free Cash Flow	15.09B	8.68B	4.50B	3.90B	5.82B	8.02B
Operating Cash Flow	15.14B	8.72B	4.54B	3.97B	5.90B	8.07B
Investing Cash Flow	-85.00M	-44.00M	-52.00M	-67.00M	-188.00M	-50.00M
Financing Cash Flow	-919.00M	-833.00M	-624.00M	-470.00M	-523.00M	-229.00M

Interactive Brokers Technical Analysis

Technical Analysis Sentiment

Positive

Last Price70.36

Price Trends

50DMA

64.44

Positive

100DMA

59.66

Positive

200DMA

53.21

Positive

Market Momentum

MACD

1.87

Negative

RSI

65.49

Neutral

STOCH

84.02

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IBKR, the sentiment is Positive. The current price of 70.36 is above the 20-day moving average (MA) of 65.57, above the 50-day MA of 64.44, and above the 200-day MA of 53.21, indicating a bullish trend. The MACD of 1.87 indicates Negative momentum. The RSI at 65.49 is Neutral, neither overbought nor oversold. The STOCH value of 84.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IBKR.

Interactive Brokers Risk Analysis

Interactive Brokers disclosed 38 risk factors in its most recent earnings report. Interactive Brokers reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Interactive Brokers Peers Comparison

Overall Rating

UnderperformOutperform

Sector (68)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBKR	78 Outperform	$31.33B	36.90	19.15%	0.71%	12.30%	20.76%
MS	76 Outperform	$251.57B	17.86	14.13%	2.40%	6.36%	45.50%
GS	76 Outperform	$239.14B	17.41	12.78%	1.63%	3.53%	45.85%
TW	73 Outperform	$26.00B	42.39	9.51%	0.42%	27.97%	28.39%
SCHW	70 Outperform	$170.78B	25.33	15.59%	1.13%	4.64%	54.26%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
LPLA	65 Neutral	$25.18B	21.53	29.46%	0.38%	29.23%	13.45%

* Financial Sector Average

Performance Comparison

IBKR

Interactive Brokers

70.36

33.66

91.72%

LPLA

LPL Financial

312.18

74.31

31.24%

Morgan Stanley

158.09

53.72

51.47%

SCHW

Charles Schwab

94.00

29.92

46.69%

Goldman Sachs Group

789.98

303.34

62.33%

Tradeweb Markets

103.59

-29.41

-22.11%

Interactive Brokers Corporate Events

Delistings and Listing ChangesRegulatory Filings and Compliance

Interactive Brokers Removes Shares from SEC Registration

Neutral

Jul 30, 2025

On July 30, 2025, Interactive Brokers Group, Inc. announced the removal of 3,836,000 shares of its common stock from its shelf Registration Statement filed with the SEC. This action, supported by a legal opinion from Dechert LLP, may impact the company’s stock availability and market strategy.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 29, 2025