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Interactive Brokers Group (IBKR)
NASDAQ:IBKR
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Interactive Brokers
(NASDAQ:IBKR)
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Rating:78Outperform
Price Target:
$84.00
▲(11.60% Upside)
The score is driven primarily by strong financial performance (high profitability and very strong cash generation) and a bullish technical setup (price above major moving averages with positive MACD). Offsetting these positives are a relatively expensive valuation (high P/E and low dividend yield) and earnings-call risks around rate-cut sensitivity and regulatory uncertainty.
Positive Factors
Revenue Growth
Strong revenue growth through increased commissions and trading volumes indicates robust market demand and effective business operations, supporting long-term financial stability.
Product Expansion
Expanding product offerings in international markets enhances competitive positioning and diversifies revenue streams, contributing to sustainable growth.
Cash Generation
Strong cash generation relative to earnings indicates efficient operations and provides financial flexibility for future investments and debt management.
Negative Factors
High Leverage
High leverage increases financial risk, particularly in a rising interest rate environment, potentially impacting long-term financial stability.
Challenges in China
Regulatory challenges in China may limit growth opportunities in a significant market, affecting future account acquisition and revenue potential.
Decline in Futures Volumes
A decline in futures volumes reflects potential market saturation or competitive pressures, which could impact revenue from this segment.
Interactive Brokers (IBKR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$33.35B
Dividend Yield0.46%
Average Volume (3M)4.10M
Price to Earnings (P/E)33.7
Beta (1Y)1.52
Revenue Growth11.88%
EPS Growth28.96%
CountryUS
Employees3,027
SectorFinancial
Sector Strength70
IndustryInvestment - Banking & Investment Services
Share Statistics
EPS (TTM)0.65
Shares Outstanding445,363,700
10 Day Avg. Volume5,717,464
30 Day Avg. Volume4,096,081
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 Cap14.90
Enterprise Value/Revenue50.17
Enterprise Value/Gross Profit56.15
Enterprise Value/Ebitda56.61
Forecast
1Y Price Target
$83.60Price Target Upside11.07% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)2.37
Revenue Forecast (FY)$6.82B
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. The primary source is commission fees from trading activities, where customers pay for executing trades across various asset classes. Additionally, IBKR earns interest income from margin lending, where clients borrow funds to trade on margin, and from securities lending, where the firm lends out securities to short sellers and earns fees. The company also generates revenue from market data subscriptions and other ancillary services. Significant partnerships with financial institutions and technology providers enhance its service offerings and contribute to its competitive edge in the brokerage industry.
Interactive Brokers Key Performance Indicators (KPIs)
Any
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.
Tracks the total number of customer accounts, indicating the company’s market reach and growth in user base, which can drive future revenue.
Data provided by:
The Fly
The FlyInteractive Brokers Earnings Call Summary
Earnings Call Date:Jan 20, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 21, 2026
Earnings Call Sentiment Positive
The call highlighted multiple strong operational and financial outcomes: record annual net revenues (> $6B), sustained quarterly adjusted pretax income above $1B, double-digit growth across commissions, net interest income and trading volumes, rapid client and assets growth (+1M accounts, client equity +37%), and meaningful platform and product expansion (AI features, new markets, ForecastX momentum). Lowlights included a non-core currency diversification loss, lower commission per order due to mix and regulatory fee changes, regulatory uncertainty for prediction markets, modest crypto traction, sensitivity to future rate cuts (25 bp scenario impacts), and ongoing advertising-driven expense increases. Overall, the positives — magnitude of revenue and volume growth, strong margins, client outperformance, and balance sheet strength — materially outweigh the identified challenges.Q4-2025 Updates
Positive Updates
Record Annual and Quarterly Financials
Full-year net revenues exceeded $6.0 billion for the first time; quarterly adjusted pretax income surpassed $1 billion for the fifth consecutive quarter. Pretax margin matched the third-quarter record of 79% and achieved a record 77% for the year.
Strong Commission and Trading Revenue Growth
Commission revenues reached a quarterly record of $582 million and full-year commissions were $2.1 billion, up 27% year-over-year, driven by higher trading volumes across major product categories.
Robust Net Interest Income Despite Rate Cuts
GAAP net interest income rose 20% year-over-year to $966 million for the quarter and $3.6 billion for the year; adjusted NIM presentation pushed net interest income to just over $1.0 billion for the quarter for the first time.
Exceptional Client Growth and Asset Expansion
Added more than 1,000,000 net new accounts in 2025 (annual record). Client equity rose 37% year-over-year to $780 billion (an increase of more than $200 billion) — first time ending a year above $750 billion.
Highly Active Client Outcomes and Engagement
Clients outperformed the S&P 500 in 2025: individual investors up 19.2% (+130 bps vs S&P 17.9%), financial advisers up 20.57% (+267 bps), and hedge fund clients up 28.91% (+11 percentage points). Total customer DARTs were 4 million trades/day, up 30% year-over-year.
Significant Volume Growth Across Asset Classes
Options contract volumes up 27% versus prior-year quarter (26% for the full year), futures contract volumes rose 22% for the quarter (12% for the year), stock share volumes rose 16% for the quarter and 38% for the full year.
Balance Sheet Strength and Capital Position
Total assets ended the year 35% higher at $23 billion, firm equity rose 23% to exceed $20 billion, and the company maintains no long-term debt.
Product, Geographic and Platform Expansion
Expanded market access to Brazil, Taiwan, UAE, and Slovenia; added Swedish ISKs, Japan NISAs, and Canadian FHSAs; enabled Stablecoin funding and doubled FDIC suite eligible cash limits; launched Global Trader 2.0 mobile revamp and multiple AI features (AI themes, AI news summaries, Ask IBKR).
ForecastX Growth and New Initiatives
ForecastX volume surged to 286 million pairs traded in the quarter (up from 15 million pairs in Q3), now listing over 10,000 instruments with multiple members quoting — demonstrating rapid early adoption.
Negative Updates
Non-Core Loss in Currency Diversification Program
Other income was $10 million reported (and $37 million adjusted), driven primarily by a loss in the currency diversification program, which reduced non-core income for the quarter.
Compression in Commission Per Order
Commission per cleared commissionable order fell to $2.64 versus the prior year, driven by a mix of smaller average order sizes in stocks and futures and the SEC fee rate moving to zero (which lowered both commissions and execution expense).
Regulatory Uncertainty for Prediction Markets
Legal/regulatory risk highlighted by a recent Massachusetts ruling against a rival (Kashi) creates uncertainty for certain prediction market products (e.g., sports contracts); ForecastX faces ongoing regulatory/legal questions that could affect product offerings.
Limited Crypto Revenue and Brand Presence
Crypto revenues remain small relative to the company's overall revenues; adoption among certain client channels (e.g., iBrokers) has been limited and the firm is not yet a major brand in crypto.
Interest-Rate Sensitivity and Potential Headwinds
Management estimates a 25 basis point decrease in the U.S. benchmark rate would reduce annual net interest income by approximately $77 million (and a 25 bp drop in non-USD benchmarks by ~$31 million), indicating continued sensitivity to rate moves despite year-to-date growth.
Rising Ongoing Operating Costs (Excluding One-Offs)
G&A excluding prior-year one-time items rose ~10% year-over-year, driven mainly by increased advertising; compensation and headcount grew (~6% headcount increase, compensation expense up ~10%), indicating moderate ongoing expense growth.
Execution Cost Changes Passed Through to Clients
Execution, clearing, and distribution costs declined 21% year-over-year to $91 million due mainly to the SEC fee rate moving to zero and higher exchange rebates; these reductions largely pass through to customers, lowering revenue rather than improving firm profitability.
Company Guidance
Management's forward-looking guidance was focused and metric-driven: they expect the National Trust Charter bank to be operational by the end of the year if approved, and quantified rate sensitivity—estimating a 25 basis‑point cut in U.S. fed funds would reduce annual net interest income by about $77 million (and a 25 bp reduction across non‑USD benchmarks would cut NII by about $31 million), noting that balance growth would mitigate those impacts; expense growth is expected to remain moderate and roughly in line with recent trends (headcount rose ~6% to 3,182 in 2025, compensation increased ~10%, compensation-to-adjusted-net-revenues was 9% in Q4 and ~10% for the year); account growth should continue ( >1,000,000 net new accounts in 2025), overnight trading and new products are key growth drivers (overnight volume +76% QoQ, +130% YoY; ForecastX traded 286 million pairs in Q4 vs. 15 million in Q3, with >10,000 instruments and 4 quoting members), and geographic/product expansion will continue (new markets in 2025 and further country rollouts planned for 2026), while a European banking license is not urgent (Ireland most likely eventual location).Interactive Brokers Financial Statement Overview
Summary
Strong fundamentals led by robust cash generation (Cash Flow Score 90) and solid profitability with high gross/EBIT margins (Income Statement Score 85). The main offset is balance-sheet risk from high leverage (Balance Sheet Score 70), which raises sensitivity to adverse funding or rate conditions.Income Statement
Interactive Brokers shows strong revenue growth with a 4.1% increase in TTM, supported by high gross and EBIT margins of 80.6% and 75.5% respectively. The net profit margin is solid at 9.2%, indicating efficient cost management. However, the slight decline in gross profit margin from previous years suggests rising costs or competitive pressures.85
Very Positive
Balance Sheet
The company's balance sheet reflects high leverage with a debt-to-equity ratio of 5.30, which could pose risks if interest rates rise. However, the return on equity is strong at 19.6%, indicating effective use of equity to generate profits. The equity ratio is relatively low, suggesting a reliance on debt financing.70
Positive
Cash Flow
Cash flow performance is robust with a 5.9% growth in free cash flow and a high operating cash flow to net income ratio of 1514.3, indicating strong cash generation relative to earnings. The free cash flow to net income ratio is nearly 1, showing efficient conversion of income to cash.90
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.90B | 9.32B | 7.79B | 4.19B | 2.94B | 2.42B |
| Gross Profit | 8.85B | 8.29B | 6.87B | 3.41B | 2.31B | 1.80B |
| EBITDA | 8.78B | 7.99B | 6.60B | 3.11B | 2.09B | 1.59B |
| Net Income | 917.00M | 755.00M | 600.00M | 380.00M | 308.00M | 195.00M |
Balance Sheet | ||||||
| Total Assets | 200.22B | 150.14B | 128.25B | 115.14B | 109.11B | 95.68B |
| Cash, Cash Equivalents and Short-Term Investments | 5.13B | 3.63B | 3.75B | 3.44B | 2.40B | 4.29B |
| Total Debt | 904.00M | 16.26B | 11.36B | 8.96B | 11.80B | 9.96B |
| Total Liabilities | 180.74B | 133.54B | 114.18B | 103.53B | 98.89B | 86.68B |
| Stockholders Equity | 5.11B | 4.28B | 3.58B | 2.85B | 2.40B | 1.95B |
Cash Flow | ||||||
| Free Cash Flow | 15.98B | 8.68B | 4.50B | 3.90B | 5.82B | 8.02B |
| Operating Cash Flow | 16.04B | 8.72B | 4.54B | 3.97B | 5.90B | 8.07B |
| Investing Cash Flow | -94.00M | -44.00M | -52.00M | -67.00M | -188.00M | -50.00M |
| Financing Cash Flow | -972.00M | -833.00M | -624.00M | -470.00M | -523.00M | -229.00M |
Interactive Brokers Technical Analysis
Positive
75.27
Price Trends
68.08
Positive
67.87
Positive
61.60
Positive
Market Momentum
2.21
Positive
61.36
Neutral
55.74
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 75.27 is above the 20-day moving average (MA) of 73.52, above the 50-day MA of 68.08, and above the 200-day MA of 61.60, indicating a bullish trend. The MACD of 2.21 indicates Positive momentum. The RSI at 61.36 is Neutral, neither overbought nor oversold. The STOCH value of 55.74 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $33.35B | 33.73 | 20.41% | 0.46% | 11.88% | 28.96% | |
78 Outperform | $32.75B | 16.14 | 17.16% | 1.26% | 6.45% | 5.85% | |
75 Outperform | $27.74B | 28.46 | 21.51% | 1.06% | 16.74% | 26.74% | |
73 Outperform | $24.37B | 35.20 | 10.51% | 0.45% | 22.17% | 40.13% | |
70 Outperform | $30.40B | 15.15 | 27.79% | 1.14% | ― | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | $29.17B | 33.38 | 20.86% | 0.32% | 35.19% | -18.62% |
* Financial Sector Average
IBKR
Interactive Brokers
75.27
19.69
35.44%
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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.