Interactive Brokers
IBKR
$92.06
+0.70%
Interactive Brokers Group is a global automated electronic broker and market maker, providing execution and clearing services for stocks, options, futures, currencies, and bonds across over 170 exchanges and 40 countries. The company distinguishes itself through its best-in-class order execution, low-cost margin lending, and sophisticated trading technology, catering to a clientele of hedge funds, proprietary traders, and introducing brokers. Currently, the stock is in focus due to robust account growth (34% YoY) and a surge in daily average revenue trades (DARTs) up 53% YoY, alongside regulatory tailwinds like the elimination of the PDT rule, which is expected to boost retail trading activity. However, recent Q1 revenue fell short of expectations, and the stock's high valuation has prompted debate about whether earnings can keep pace with lofty market expectations.…
IBKR
Interactive Brokers
$92.06
Related headlines
Investment Opinion: Should I buy IBKR Today?
Rating: Buy. IBKR's strong growth trajectory, superior profitability, and regulatory tailwinds justify a Buy rating, with an average analyst target of $106.30 implying ~23.6% upside. The company's 34% account growth and 53% DART growth are exceptional, and its 89.8% gross margin underscores operational efficiency. However, the premium valuation (PE 28.84x vs. industry 22x) requires continued growth to validate, and any slowdown could lead to multiple compression. This rating would be downgraded to Hold if DART growth falls below 20% YoY or if the stock trades above $110 without corresponding earnings upgrades. Conversely, a pullback to below $75 would offer a more attractive entry point. Overall, IBKR is fairly valued relative to its growth prospects, but investors should be mindful of its high beta and market sensitivity.
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IBKR 12-Month Price Forecast
The AI assessment is bullish, driven by strong operational momentum and regulatory tailwinds. However, the high valuation and market sensitivity warrant a medium confidence level. The key risk is whether growth can sustain the premium multiple. If DARTs growth remains above 30% and revenue growth accelerates, the stock could outperform. Conversely, a slowdown in trading volumes or a market downturn would undermine the thesis. Monitoring quarterly DARTs and revenue growth will be crucial for adjusting the stance.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Interactive Brokers's 12-month outlook, with a consensus price target around $106.13 and implied upside of +15.3% versus the current price.
Average Target
$106.13
0 analysts
Implied Upside
+15.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$70 - $121
Analyst target range
The target price range spans from a low of $70.00 to a high of $121.00, indicating a wide dispersion of expectations. The high target of $121 suggests that some analysts anticipate continued strong growth and multiple expansion, while the low target of $70 implies potential downside if growth decelerates or market conditions deteriorate. The wide spread between the low and high targets (73% difference) reflects significant uncertainty about the stock's future performance, likely due to its high valuation and sensitivity to trading volumes. Recent analyst actions have been predominantly positive, with no downgrades, reinforcing the bullish consensus.
Bulls vs Bears: IBKR Investment Factors
IBKR presents a compelling growth story with explosive account and trading growth, superior margins, and regulatory tailwinds. However, the stock's premium valuation and high beta introduce significant downside risk if growth decelerates or market sentiment shifts. Currently, the bull case has stronger evidence given the accelerating operational metrics and analyst consensus, but the key tension is whether earnings can keep pace with the lofty valuation. The single most important factor is the sustainability of DARTs growth; if trading volumes normalize, the stock could face multiple compression despite solid fundamentals.
Bullish
- Explosive Account and Trading Growth: Customer accounts surged 34% YoY and DARTs jumped 53% YoY, driving Q1 2026 revenue to $2.701B, up 16.9% YoY. This accelerating growth trajectory, from $2.302B in Q2 2024 to $2.701B in Q1 2026, demonstrates strong market share gains and rising client engagement.
- Superior Profitability Metrics: IBKR boasts a gross margin of 89.8% and operating margin of 86.0%, far exceeding typical brokerage margins. Net margin improved to 9.89% in Q1 2026 from 9.22% a year earlier, reflecting operational leverage and efficient cost management.
- Regulatory Tailwinds from PDT Rule Elimination: The SEC's elimination of the PDT rule in April 2026 is a direct catalyst for retail trading volumes. As a leading retail broker, IBKR is well-positioned to benefit from increased activity from smaller accounts, potentially boosting commissions and DARTs further.
- Strong Analyst Consensus and Upside: With a 'Buy' rating and an average target price of $106.30, analysts see ~23.6% upside from the current price of $86.02. The high target of $121 implies 40.7% upside, reflecting confidence in sustained growth and multiple expansion.
Bearish
- High Valuation Premium to Peers: IBKR trades at a trailing PE of 28.84x and forward PE of 27.02x, a 31% premium to the industry average of 22x. This premium leaves little room for error; any growth disappointment could trigger multiple compression.
- Q1 Revenue Missed Expectations: Despite strong operational metrics, Q1 2026 revenue of $2.701B fell short of Wall Street estimates, causing the stock to slip post-earnings. This highlights the risk that even robust growth may not meet the market's high bar.
- Earnings Growth Expected to Decelerate: The forward PE of 27.02x implies only ~6.7% EPS growth over the next year, a sharp slowdown from the 22.4% YoY growth in Q1 2026 EPS. If growth fails to accelerate, the premium valuation becomes harder to justify.
- High Beta and Market Sensitivity: With a beta of 1.343, IBKR is significantly more volatile than the market. In a market downturn, the stock could underperform, as evidenced by its -9.04% 1-month return while the S&P 500 gained 2.79%.
IBKR Technical Analysis
IBKR has been in a strong uptrend over the past year, with the stock price up 34.79% over the 1-year period, significantly outperforming the S&P 500's 21.46% gain. The current price of $86.02 sits at 87.9% of its 52-week range (between $58.95 low and $97.84 high), indicating the stock is trading near its highs, reflecting robust momentum but also potential overextension. The 6-month price change of +15.32% further confirms the longer-term bullish trend, though the stock has pulled back from its July peak of $97.41.
Beta
1.34
1.34x market volatility
Max Drawdown
-18.8%
Largest decline past year
52-Week Range
$59-$98
Price range past year
Annual Return
+44.0%
Cumulative gain past year
| Period | IBKR Return | S&P 500 |
|---|---|---|
| 1m | -5.5% | +2.9% |
| 3m | +5.8% | +5.0% |
| 6m | +23.2% | +13.9% |
| 1y | +44.0% | +20.4% |
| ytd | +36.9% | +13.8% |
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IBKR Fundamental Analysis
Interactive Brokers has demonstrated strong revenue growth, with Q1 2026 revenue of $2.701 billion, up 16.93% year-over-year from $2.310 billion in Q1 2025. This growth is driven by a 53% surge in DARTs and a 34% increase in customer accounts, with commissions contributing $613 million in the quarter. The company's revenue has been consistently growing over the past quarters, from $2.302 billion in Q2 2024 to $2.701 billion in Q1 2026, indicating an accelerating growth trajectory. The firm's net income of $267 million in Q1 2026 reflects a net margin of 9.89%, which is stable compared to the 9.22% margin in Q1 2025, showing consistent profitability.
Quarterly Revenue
$2.7B
2026-03
Revenue YoY Growth
+16.9%
YoY Comparison
Gross Margin
96.1%
Latest Quarter
Free Cash Flow
$16.8B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is IBKR Overvalued?
Given that Interactive Brokers is profitable with a trailing EPS of $0.034, the PE ratio is the most appropriate valuation metric. The trailing PE is 28.84x, while the forward PE is 27.02x, indicating the market expects modest earnings growth of about 6.7% over the next year. This relatively small gap between trailing and forward multiples suggests that the market is pricing in steady, but not explosive, growth. Compared to the industry average PE of 22x, IBKR trades at a 31% premium, which is justified by its superior growth and profitability metrics, including a gross margin of 89.8% and operating margin of 86.0%.
PE
28.8x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 14x~35x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
11.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include a high valuation that leaves little margin for error; the forward PE of 27x implies only ~6.7% EPS growth, and any shortfall could trigger a de-rating. The company's net margin of 9.89% is relatively thin, and while operating margins are strong, the reliance on interest income (which contributed $1.947B in Q1) exposes earnings to interest rate fluctuations. Additionally, free cash flow is robust at $16.761B TTM, but the payout ratio of 13.6% suggests limited dividend growth potential, which may disappoint income-focused investors.
FAQ
The key risks include: 1) Valuation risk - the premium PE could compress if growth decelerates, as seen in the Q1 revenue miss. 2) Market risk - high beta (1.343) means the stock is sensitive to market downturns, with a 1-month return of -9.04% vs. S&P 500's +2.79%. 3) Regulatory risk - changes in trading rules or interest rates could impact revenue. 4) Competitive risk - zero-commission brokers like Robinhood could pressure market share. The most severe risk is a prolonged market downturn, which could lead to a -18.6% decline to the low target of $70.
The 12-month forecast is bullish, with a base case target of $90-$106 (50% probability), a bull case of $100-$121 (30% probability), and a bear case of $70-$80 (20% probability). The most likely scenario is moderate growth, with DARTs growth of 25-30% and revenue growth of 15-18%. The stock is expected to reach the average analyst target of $106.30, implying ~23.6% upside. However, the forecast is highly dependent on trading volumes and market conditions.
IBKR trades at a trailing PE of 28.84x and forward PE of 27.02x, a 31% premium to the industry average of 22x. This premium is justified by its superior growth and profitability, but it leaves little room for error. The PEG ratio of 1.05 suggests the stock is fairly valued relative to its growth rate. The market is pricing in continued strong growth, and any disappointment could lead to multiple compression.
IBKR is a good buy for investors seeking exposure to a high-growth brokerage with strong competitive advantages. The stock offers ~23.6% upside to the average analyst target of $106.30, supported by 34% account growth and 53% DART growth. However, the premium valuation (PE 28.84x) and high beta (1.343) mean it is not suitable for risk-averse investors. A pullback to below $75 would provide a better entry point, but the current price is justified if growth continues.
IBKR is suitable for long-term investment, given its strong growth trajectory and competitive moat. The stock's high beta (1.343) makes it volatile in the short term, but its fundamentals support long-term appreciation. A minimum holding period of 3-5 years is recommended to ride out market cycles and benefit from compounding growth. Short-term traders may find opportunities in the stock's volatility, but the risk is elevated. The company's low dividend yield (0.47%) means income investors should look elsewhere.