Interactive Brokers (IBKR) AI Stock Analysis

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Interactive Brokers

(NASDAQ:IBKR)

Rating:79Outperform

Price Target:

$67.00

▲(12.74%Upside)

Interactive Brokers' strong financial performance and positive earnings call highlight its robust growth and profitability. The technical analysis indicates bullish momentum, though caution is advised due to overbought signals. Valuation concerns due to a high P/E ratio slightly offset the positive outlook.

Positive Factors

Account Growth

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

Business Strategy

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

Negative Factors

Revenue Performance

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

$25.91B

Dividend Yield2.15%

Average Volume (3M)5.13M

Price to Earnings (P/E)31.1

Beta (1Y)1.25

Revenue Growth12.25%

EPS Growth20.76%

CountryUS

Employees3,027

SectorFinancial

Sector Strength75

IndustryFinancial - Capital Markets

Share Statistics

EPS (TTM)0.51

Shares Outstanding435,835,330

10 Day Avg. Volume4,329,233

30 Day Avg. Volume5,134,879

Financial Highlights & Ratios

PEG Ratio7.16

Price to Book (P/B)5.77

Price to Sales (P/S)0.00

P/FCF Ratio10.53

Enterprise Value/Market Cap3.75

Enterprise Value/Revenue4.78

Enterprise Value/Gross Profit17.94

Enterprise Value/Ebitda5.51

Forecast

1Y Price Target

$52.96

Price Target Upside-10.89% Downside

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 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:Jul 18, 2025

(Q2-2025)

% Change Since: 37.28%|

Next Earnings Date:Oct 21, 2025

Earnings Call Sentiment Positive

The earnings call depicted a robust financial performance with record-breaking metrics and significant client growth, underpinned by strategic enhancements and product innovations. However, there are challenges in capturing cryptocurrency market share and managing execution costs during overnight trading hours.

Q2-2025 Updates

Positive Updates

Record-Breaking Financial Performance

Quarterly commissions, net interest, total net revenue, and pretax income were all records, with a pretax income reaching over a billion dollars for the third consecutive quarter. The pretax profit margin was an industry-leading 75%.

Significant Client Growth

Added 250,000 net new accounts in the quarter, bringing the year-to-date total to over 528,000. Client equity rose 34% to $604 billion.

Expansion of Trading Capabilities

Overnight trading volumes grew over 170% from Q2 2024 to Q2 2025. Enhanced ATS performance to handle large spikes in volume and made improvements to the smart order router.

Introduction of New Products

Introduced 'Investment Themes' to help clients turn market trends into actionable trading ideas. Expanded into Forecast X contracts on financial markets, forex, and crypto.

Strong International Growth

Significant interest and growth in international markets, particularly with offering US stock trading during overnight hours to cater to European and Asian clients.

Negative Updates

Challenges with Cryptocurrency Market Share

Despite having a lower cost offering, the firm has not captured as much market share in the crypto space as expected. Current infrastructure does not allow for crypto asset transfers.

Execution Cost Differences

There are significant execution cost differences for stocks during overnight hours as compared to regular trading hours.

Company Guidance

During the Interactive Brokers Group Second Quarter 2025 Earnings Call, the company provided guidance that highlighted significant growth metrics. They reported a 27% increase in commission revenue compared to the previous year, reaching a total of $516 million, and noted a 170% growth in overnight trading volumes. The company added 250,000 net new accounts in the quarter, bringing the year-to-date total to over 528,000 accounts. Client credit balances rose 34% to a record $144 billion, while client equity increased 34% to $604 billion. Their pretax income surpassed one billion dollars for the third consecutive quarter, maintaining a pretax profit margin of 75%. The firm continues to enhance its platform capabilities, including a scalable ATS and improvements to their smart order router, which contributed to their competitive advantage in price execution. Additionally, they launched new products like Forecast X and investment themes to enhance client trading experiences, and completed a four-for-one stock split while increasing dividends.

Interactive Brokers Financial Statement Overview

Summary

Interactive Brokers demonstrates outstanding financial performance with strong growth and profitability. The income statement reveals robust revenue growth and high profit margins. The balance sheet shows a stable financial position with low leverage and high returns on equity. Cash flow analysis highlights strong cash generation, providing ample liquidity and strategic flexibility.

Income Statement

Very Positive

Interactive Brokers has demonstrated strong growth in revenue and profitability. The TTM data shows a robust gross profit margin of 85.3% and a net profit margin of 12.5%. Revenue growth is impressive at 22.65% year-over-year from 2024 to the TTM. EBIT and EBITDA margins are also strong at 67.2% and 68.7%, respectively, indicating efficient cost management and high profitability. The consistent upward trajectory in revenue and profit margins showcases the company's solid financial performance.

Balance Sheet

Very Positive

The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.0027, indicating minimal leverage. The return on equity (ROE) is a robust 17.6%, showcasing effective utilization of shareholders’ funds. The equity ratio stands at 2.9%, which is relatively low, suggesting a higher reliance on liabilities for financing. Despite this, the company's strong equity growth and sufficient liquidity position it well within the industry.

Cash Flow

Very Positive

Interactive Brokers exhibits strong cash flow generation, with a significant free cash flow growth rate of 10.34% from 2024 to TTM. The operating cash flow to net income ratio is high at 12.13, indicating excellent cash conversion efficiency. The free cash flow to net income ratio is also robust at 12.07, highlighting the company's ability to generate substantial free cash flow relative to net income. This strength in cash flow supports the company's strategic flexibility and financial health.

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 Price59.43

Price Trends

50DMA

52.94

Positive

100DMA

48.25

Positive

200DMA

46.79

Positive

Market Momentum

MACD

2.19

Negative

RSI

70.69

Negative

STOCH

78.57

Neutral

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 59.43 is above the 20-day moving average (MA) of 56.08, above the 50-day MA of 52.94, and above the 200-day MA of 46.79, indicating a bullish trend. The MACD of 2.19 indicates Negative momentum. The RSI at 70.69 is Negative, neither overbought nor oversold. The STOCH value of 78.57 is Neutral, 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
LPLA	80 Outperform	$29.46B	26.22	40.36%	0.33%	26.32%	8.63%
IBKR	79 Outperform	$25.91B	31.13	19.15%	2.15%	12.25%	20.76%
SCHW	78 Outperform	$166.45B	27.85	14.12%	1.18%	2.32%	37.66%
MS	77 Outperform	$224.27B	15.96	14.13%	2.65%	6.31%	45.50%
TW	77 Outperform	$31.78B	55.21	9.14%	0.35%	28.86%	29.26%
GS	71 Outperform	$215.56B	16.30	12.78%	1.69%	-0.34%	45.85%
Sector *	68 Neutral	$16.73B	11.75	9.79%	3.76%	11.87%	-7.97%

* Financial Sector Average

Performance Comparison

IBKR

Interactive Brokers

59.43

29.45

98.23%

LPLA

LPL Financial

378.87

168.14

79.79%

Morgan Stanley

140.90

41.97

42.42%

SCHW

Charles Schwab

93.10

31.88

52.07%

Goldman Sachs Group

705.84

230.87

48.61%

Tradeweb Markets

138.00

28.96

26.56%

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: Jul 03, 2025