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Interactive Brokers Group (IBKR)
NASDAQ:IBKR
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Interactive Brokers
(NASDAQ:IBKR)
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Rating:75Outperform
Price Target:
$80.00
▲(12.38% Upside)
Action:ReiteratedDate:02/28/26
The score is driven primarily by strong financial performance (revenue scale-up, improving margins, and exceptional cash generation) and a constructive earnings call highlighting record results and accelerating client growth. This is tempered by a higher valuation (P/E ~32 with a low yield) and only neutral-to-mixed technicals (near-term weakness versus the 20-day average despite a longer-term uptrend).
Positive Factors
Multi-year Revenue Expansion
Sustained revenue growth over several years signals durable demand for IBKR's multi-asset execution, custody and brokerage services. A larger revenue base supports scale advantages, investment in product/geo expansion, and underpins long-term profitability resilience across market cycles.
Exceptional Cash Generation
Very large and consistent operating and free cash flows provide durable financial flexibility: funds for product investment, share repurchases, optional debt reductions, and cushioning versus revenue volatility. High cash conversion supports sustainable capital allocation over years.
Rapid Client & Platform Expansion
Large net account additions, rising client equity and accelerating DARTs indicate strong product-market fit and stickiness. Combined with new products (ForecastX, stablecoin funding, Global Trader 2.0) and country rollouts, this drives diversified volumes and durable cross-sell opportunities.
Negative Factors
Leverage Reporting Uncertainty
A sharp year-over-year swing in reported debt introduces uncertainty about true leverage and capital structure. That complicates forecasting funding flexibility, liquidity buffers, and stress scenarios, and raises questions on one-off vs structural balance-sheet changes.
Revenue Growth Deceleration Risk
Slowing top-line expansion could limit future operating leverage and margin expansion. If account and volume gains moderate, pressure on incremental profitability may emerge, making sustained investment and return targets harder to meet over the medium term.
Regulatory Risk for New Products
Regulatory/legal uncertainty around prediction-market style products is a structural risk: restrictions or adverse rulings could curtail product availability, revenue diversification, and go-to-market timing for ForecastX, limiting upside from a fast-growing new initiative.
Interactive Brokers (IBKR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$31.71B
Dividend Yield0.46%
Average Volume (3M)4.97M
Price to Earnings (P/E)32.1
Beta (1Y)1.53
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. Volume3,365,750
30 Day Avg. Volume4,968,747
Financial Highlights & Ratios
PEG Ratio1.06
Price to Book (P/B)5.34
Price to Sales (P/S)2.80
P/FCF Ratio1.82
Enterprise Value/Market Cap3.72
Enterprise Value/Revenue11.54
Enterprise Value/Gross Profit12.85
Enterprise Value/Ebitda12.99
Forecast
1Y Price Target
$83.50Price Target Upside17.29% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)2.47
Revenue Forecast (FY)$6.86B
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 multi-year revenue expansion and improving profitability, supported by exceptional operating/free cash flow and high cash conversion. Key risks are decelerating recent revenue growth and uncertainty created by the sharp reported swing in debt levels in 2025.Income Statement
Revenue has grown materially over the period (from ~$2.4B in 2020 to ~$10.2B in 2025), indicating strong business momentum despite some variability in the annual growth rate. Profitability looks strong and improving, with very high gross and operating profitability in recent years and net margin rising to ~9.6% in 2025 (vs ~8.1% in 2024 and ~7.7% in 2023). The main watch-out is that revenue growth appears to be decelerating recently (2025 growth is modest versus prior years), which could limit incremental profit growth if the trend persists.86
Very Positive
Balance Sheet
The balance sheet shows a notable shift in leverage: debt-to-equity was high for several years (roughly ~3–5x from 2020–2024), but 2025 shows extremely low leverage (debt-to-equity ~0.00x) alongside higher equity (~$5.4B). Returns on equity are consistently strong and improving (about ~10% in 2020 to ~18% in 2025), signaling solid profitability relative to shareholder capital. Key risk is the sharp year-over-year change in reported debt (from ~$16.3B in 2024 to ~$0.02B in 2025), which creates uncertainty around leverage comparability and capital structure stability.74
Positive
Cash Flow
Cash generation is a major strength: operating cash flow and free cash flow are very large in absolute terms, with 2025 at ~$15.8B and ~$15.7B, respectively, and free cash flow closely tracking net income across all years (near 1.0x), indicating strong cash conversion. Cash flow growth is somewhat uneven (including declines in 2021–2022 and a slight decline in 2025), but the overall trajectory is positive with a step-up in cash generation in 2023–2025. A watch item is that the provided operating cash flow coverage values remain low in magnitude across years, suggesting limited buffer by that specific measure despite the strong absolute cash flow numbers.88
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 10.23B | 9.32B | 7.79B | 4.19B | 2.94B |
| Gross Profit | 9.19B | 8.29B | 6.87B | 3.41B | 2.31B |
| EBITDA | 9.09B | 7.99B | 6.60B | 3.11B | 2.09B |
| Net Income | 984.00M | 755.00M | 600.00M | 380.00M | 308.00M |
Balance Sheet | |||||
| Total Assets | 203.24B | 150.14B | 128.25B | 115.14B | 109.11B |
| Cash, Cash Equivalents and Short-Term Investments | 4.96B | 3.63B | 3.75B | 3.44B | 2.40B |
| Total Debt | 19.00M | 16.26B | 11.36B | 8.96B | 11.80B |
| Total Liabilities | 182.77B | 133.54B | 114.18B | 103.53B | 98.89B |
| Stockholders Equity | 5.36B | 4.28B | 3.58B | 2.85B | 2.40B |
Cash Flow | |||||
| Free Cash Flow | 15.74B | 8.68B | 4.50B | 3.90B | 5.82B |
| Operating Cash Flow | 15.81B | 8.72B | 4.54B | 3.97B | 5.90B |
| Investing Cash Flow | -171.00M | -44.00M | -52.00M | -67.00M | -188.00M |
| Financing Cash Flow | -969.00M | -833.00M | -624.00M | -470.00M | -523.00M |
Interactive Brokers Technical Analysis
Neutral
71.19
Price Trends
71.54
Negative
69.33
Positive
64.33
Positive
Market Momentum
0.08
Positive
45.17
Neutral
50.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IBKR, the sentiment is Neutral. The current price of 71.19 is below the 20-day moving average (MA) of 74.02, below the 50-day MA of 71.54, and above the 200-day MA of 64.33, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 45.17 is Neutral, neither overbought nor oversold. The STOCH value of 50.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 | $29.04B | 32.61 | 13.20% | 0.45% | 22.17% | 40.13% | |
75 Outperform | $31.71B | 32.07 | 20.41% | 0.46% | 11.88% | 28.96% | |
75 Outperform | $31.37B | 28.77 | 23.25% | 1.06% | 16.74% | 26.74% | |
71 Outperform | $30.17B | 14.99 | 17.11% | 1.26% | 6.45% | 5.85% | |
68 Neutral | $28.85B | 18.82 | 20.17% | 1.14% | ― | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
60 Neutral | $24.05B | 27.52 | 20.86% | 0.32% | 35.19% | -18.62% |
* Financial Sector Average
IBKR
Interactive Brokers
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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.