Interactive Brokers (IBKR) AI Stock Analysis

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Interactive Brokers

(NASDAQ:IBKR)

Rating:82Outperform

Price Target:

$60.00

▲(11.19%Upside)

Interactive Brokers' stock is well-supported by strong financial performance and positive earnings call insights. The stock's momentum is moderately positive, while the valuation suggests it is somewhat expensive. The company's strategic focus on expansion and innovation, alongside a robust financial foundation, positions it favorably despite market challenges.

Positive Factors

Account Growth

IBKR has averaged over 30% annualized account growth despite periods of significant market volatility.

International Expansion

Interactive Brokers is actively expanding its international presence by adding new account types, foreign language options, and launching new asset classes.

Trading Activity

Retail trading activity has remained resilient, with monthly cleared DARTs averaging 3.1M in 2025, up over 40% year-over-year.

Negative Factors

Earnings Estimates

Earnings per share estimates have been lowered due to reduced trading volume and margin loan balances, despite higher customer credit balances.

Revenues

Revenues came in lower than expected driven by lower NII.

Valuation

IBKR is trading near the upper end of the historic valuation range, indicating a balanced risk/reward at current levels.

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

Market Cap

$22.78B

Dividend Yield2.45%

Average Volume (3M)4.56M

Price to Earnings (P/E)28.9

Beta (1Y)1.20

Revenue Growth14.67%

EPS Growth23.60%

CountryUS

Employees3,027

SectorFinancial

Sector Strength79

IndustryFinancial - Capital Markets

Share Statistics

EPS (TTM)0.47

Shares Outstanding435,835,330

10 Day Avg. Volume4,303,400

30 Day Avg. Volume4,556,242

Financial Highlights & Ratios

PEG Ratio-2.82

Price to Book (P/B)2.44

Price to Sales (P/S)0.00

P/FCF Ratio1.37

Enterprise Value/Market Cap0.03

Enterprise Value/Revenue0.04

Enterprise Value/Gross Profit0.13

Enterprise Value/Ebitda0.04

Forecast

1Y Price Target

$47.81

Price Target Upside-11.40% Downside

Rating ConsensusStrong Buy

Number of Analyst Covering8

Interactive Brokers Business Overview & Revenue Model

Company DescriptionInteractive Brokers Group, Inc. operates as an automated electronic broker worldwide. The company specializes in executing, clearing, and settling trades in stocks, options, futures, foreign exchange instruments, bonds, mutual funds, exchange traded funds (ETFs), metals, and cryptocurrencies. It also custodies and services accounts for hedge and mutual funds, ETFs, registered investment advisors, proprietary trading groups, introducing brokers, and individual investors. In addition, it offers custody, prime brokerage, securities, and margin lending services. The company serves institutional and individual customers through approximately 150 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 primarily generates revenue through commissions and fees related to its brokerage services. The company charges commissions on trades executed by its clients, with the rates varying based on the financial instrument and market involved. Additionally, IBKR earns interest income from its margin lending services, where clients borrow funds to increase their purchasing power. The company also generates income from net interest on customer cash balances and its securities lending operations. Furthermore, Interactive Brokers benefits from fees associated with its technology and platform services, providing white-label brokerage solutions to other financial institutions. Significant partnerships with global exchanges and financial entities enhance its market reach and contribute to its revenue streams.

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' total customer accounts have shown robust growth, reaching 3.62 million by Q1 2025, driven by a record addition of 279,000 new accounts. This 32% growth rate surpasses previous records, with international expansion playing a key role. Despite market volatility and a decline in margin loans, the company is capitalizing on increased trading volumes and new product offerings, such as Canadian savings accounts and cryptocurrencies. The strategic focus on innovation and expansion, alongside a dividend increase and stock split, underscores a positive outlook amid challenging market conditions.

Data provided by:

Main Street Data

Interactive Brokers Earnings Call Summary

Earnings Call Date:Apr 15, 2025

(Q1-2025)

% Change Since: 24.65%|

Next Earnings Date:Jul 17, 2025

Earnings Call Sentiment Positive

The earnings call presented a largely positive outlook with record account growth, strong financial performance, increased dividends, and significant trading volume growth. However, challenges such as market volatility, a decline in margin loans, and M&A difficulties indicated some areas of concern.

Q1-2025 Updates

Positive Updates

Record Account Growth

In Q1 2025, Interactive Brokers added 279,000 new accounts, marking a 32% total account growth, with faster growth internationally. This outpaced the previous record set during the meme stock phenomenon in Q1 2021.

Strong Financial Performance

Quarterly commission revenue reached a record half a billion dollars for the first time, with a pre-tax profit margin of 74%. The adjusted pre-tax margin reached 70% or more for the eighth time.

Increased Dividend and Stock Split

The company increased its quarterly dividend to 32 cents and announced a four-for-one stock split to enhance stock liquidity and affordability for shareholders.

Impressive Trading Volume Growth

Options contract volumes grew by 25%, futures by 16%, and stock share volumes by 47%. Overall trading volumes significantly outpaced industry growth.

Overnight Trading Volume Surge

Overnight trading volumes increased by 250% year-over-year, highlighting the expansion of trading hours and product offerings.

Negative Updates

Market Volatility Impact

There was a noticeable market downturn, with the S&P 500 ending the quarter down 5%, and a 9% decline from February peaks due to factors such as AI developments and tariff talks.

Margin Loan Decline

Margin loans decreased by approximately 10-12% due to market volatility and a shift towards less risky positions by clients.

Challenges in M&A Acquisition

The company faced difficulties in closing a significant acquisition due to the inability to acquire 100% ownership, resulting in a stalled M&A strategy.

Company Guidance

During the Interactive Brokers Group First Quarter 2025 earnings call, several key metrics were highlighted. The company reported a record addition of 279,000 new accounts, marking a 32% total account growth, with international accounts expanding at an even faster pace. Client credit balances reached a record $125.2 billion, a 19% increase, and client equity rose 23% to $573.5 billion compared to 2024, despite a 1% drop in market conditions. Commission revenues hit a record half a billion dollars, contributing to total net revenues, with options contract volumes up 25%, futures up 16%, and stock share volumes up 47%. The adjusted pretax profit margin was an industry-leading 74%, marking the eighth time it reached 70% or more. Interactive Brokers announced an increased quarterly dividend of 32 cents and a four-for-one stock split to enhance liquidity. The company remains open to M&A opportunities but noted the lack of suitable acquisitions at favorable prices. Additionally, the introduction of new products, such as Canadian savings accounts and additional cryptocurrencies, highlights the company's ongoing expansion and innovation efforts.

Interactive Brokers Financial Statement Overview

Summary

Interactive Brokers shows strong revenue growth and profitability, with high gross and net profit margins. However, concerns include negative EBITDA and a recent drop in operating cash flow. The balance sheet remains robust with no debt and improving equity ratios, though stockholders' equity is relatively low compared to total assets.

Income Statement

Very Positive

Interactive Brokers shows a solid financial performance with high gross and net profit margins. Recent revenue growth has been strong, with a noticeable increase from the previous year. However, the negative EBITDA margin is a concern that needs addressing.

Balance Sheet

Positive

The company's balance sheet is stable with no debt and a healthy equity ratio. Return on equity has been improving, reflecting effective use of shareholders' equity. However, the relatively low stockholders' equity compared to total assets is a potential risk.

Cash Flow

Positive

The cash flow statement indicates fluctuations, with operating cash flow dropping to zero recently. While free cash flow has shown growth in past years, the current lack of positive operating cash flow is a concern that needs monitoring.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.18B	4.42B	3.17B	2.75B	2.24B
Gross Profit	5.18B	4.42B	3.17B	2.75B	2.24B
EBITDA	4.28B	3.67B	2.54B	2.17B	1.76B
Net Income	755.00M	600.00M	380.00M	308.00M	195.00M
Balance Sheet
Total Assets	150.14B	128.25B	115.14B	109.11B	95.68B
Cash, Cash Equivalents and Short-Term Investments	3.63B	3.75B	3.44B	2.40B	4.29B
Total Debt	14.00M	11.36B	8.96B	11.80B	9.96B
Total Liabilities	133.54B	114.18B	103.53B	98.89B	86.68B
Stockholders Equity	4.28B	3.58B	2.85B	2.40B	1.95B
Cash Flow
Free Cash Flow	8.68B	4.50B	3.90B	5.82B	8.02B
Operating Cash Flow	8.72B	4.54B	3.97B	5.90B	8.07B
Investing Cash Flow	-44.00M	-52.00M	-67.00M	-188.00M	-50.00M
Financing Cash Flow	-833.00M	-624.00M	-470.00M	-523.00M	-229.00M

Interactive Brokers Technical Analysis

Technical Analysis Sentiment

Positive

Last Price53.96

Price Trends

50DMA

48.69

Positive

100DMA

48.10

Positive

200DMA

45.13

Positive

Market Momentum

MACD

0.90

Positive

RSI

63.53

Neutral

STOCH

83.44

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 53.96 is above the 20-day moving average (MA) of 51.91, above the 50-day MA of 48.69, and above the 200-day MA of 45.13, indicating a bullish trend. The MACD of 0.90 indicates Positive momentum. The RSI at 63.53 is Neutral, neither overbought nor oversold. The STOCH value of 83.44 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 (73)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBKR	82 Outperform	$22.78B	28.85	19.26%	2.45%	14.67%	23.60%
MS	80 Outperform	$220.95B	16.16	13.88%	2.65%	6.53%	55.54%
LPLA	80 Outperform	$29.14B	24.98	40.36%	0.33%	26.32%	8.63%
SCHW	78 Outperform	$162.51B	27.30	14.12%	1.21%	2.32%	37.66%
TW	77 Outperform	$34.06B	59.18	9.14%	0.33%	28.86%	29.26%
Sector *	73 Outperform	S$31.84B	13.61	11.69%	6.58%	8.28%	16.42%
GS	72 Outperform	$205.54B	15.55	12.26%	1.79%	7.70%	68.64%

* Financial Sector Average

Performance Comparison

IBKR

Interactive Brokers

53.96

23.50

77.15%

LPLA

LPL Financial

364.96

86.83

31.22%

Morgan Stanley

140.69

46.51

49.38%

SCHW

Charles Schwab

89.98

17.31

23.82%

Goldman Sachs Group

690.81

247.78

55.93%

Tradeweb Markets

144.93

39.28

37.18%

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: Jun 22, 2025