Interactive Brokers
IBKR
$89.05
+0.85%
Interactive Brokers Group, Inc. is a large, automated electronic brokerage and market-making firm that serves retail, institutional, and introducing-broker clients across more than 170 electronic exchanges, 40 countries, and 29 currencies, with roughly 80% of active accounts located outside the United States. The company is best known for best-in-class order execution, extremely low margin lending rates, and a technology-first platform that caters to sophisticated hedge funds, proprietary traders, and introducing brokers, who account for roughly 45% of commissions. The current investor narrative centers on powerful client-account and trading-volume growth — accounts grew 34% year over year and DARTs surged 53% in the most recent monthly metrics — alongside the elimination of the SEC's pattern day trader rule, which removes a structural barrier to retail engagement. At the same time, debate is intensifying around whether the stock's premium valuation can be sustained, particularly after Q1 revenue missed Wall Street expectations and management faces the challenge of converting record engagement into consistent earnings beats.…
IBKR
Interactive Brokers
$89.05
Related headlines
Investment Opinion: Should I buy IBKR Today?
Based on the synthesis, IBKR warrants a Buy rating for long-term investors, anchored by a consensus analyst target of $105.40 (19.4% upside) and a recommendation mean of 1.87 (buy). The core thesis is that IBKR's technology-driven platform, global reach, and robust account growth (34% YoY) will continue to drive market share gains and earnings growth, justifying a premium valuation. Supporting evidence includes 19.6% revenue growth in Q2 2026, net margin expansion to 10.57%, a debt-to-equity ratio of 0.0035, and free cash flow of $15.8 billion TTM. The PEG ratio of 1.05 suggests the stock is fairly valued relative to growth. However, risks include premium valuation (PE 28.84x vs. historical range 13.70-31.09x), interest rate sensitivity, and competitive pressures. The rating would upgrade to Strong Buy if revenue growth accelerates above 25% or if the PE compresses below 25x; it would downgrade to Hold if revenue growth decelerates below 15% or if net interest margins contract significantly. Relative to peers, IBKR trades at a premium, but its superior profitability and growth justify it. The stock appears fairly valued to slightly undervalued based on analyst targets.
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IBKR 12-Month Price Forecast
IBKR presents a compelling growth story with robust account acquisition, high margins, and a strong balance sheet. The analyst consensus is bullish, but the premium valuation and recent revenue miss introduce uncertainty. The base case (50% probability) targets $95-110, reflecting steady execution. The bull case (30%) could see $121 if growth accelerates, while the bear case (20%) risks a drop to $70 or lower on margin compression. I would upgrade to high confidence if revenue growth accelerates above 25% and the stock breaks above $98.75 resistance. I would downgrade if net interest margins contract significantly or if account growth slows below 20%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Interactive Brokers's 12-month outlook, with a consensus price target around $105.40 and implied upside of +18.4% versus the current price.
Average Target
$105.40
0 analysts
Implied Upside
+18.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$70 - $121
Analyst target range
IBKR is covered by 14 analysts, with a consensus recommendation of "buy" and a recommendation mean of 1.87 on a scale where 1.0 is a strong buy and 5.0 is a strong sell, indicating a bullish tilt. The average target price is $105.40, which implies approximately 19.4% upside from the current price of $88.30. The consensus EPS estimate averages $4.95, with a low of $4.73 and a high of $5.17, while estimated revenue averages $12.934 billion, ranging from $12.484 billion to $13.380 billion. The bullish consensus is reinforced by recent institutional ratings, with Goldman Sachs reiterating a Buy in September 2026, Barclays and BMO Capital maintaining Overweight and Outperform ratings in July 2026, and Piper Sandler and B of A Securities also reaffirming positive stances. The target price range spans from a low of $70.00 to a high of $121.00, a spread of $51.00 or roughly 58% of the average target, which signals meaningful disagreement among analysts about the company's trajectory. The high target of $121.00 implies roughly 37% upside and likely assumes accelerating account growth, continued DART expansion, multiple expansion toward the upper end of the historical PE band, and successful monetization of new regulatory tailwinds such as the elimination of the PDT rule. The low target of $70.00 implies approximately 21% downside and likely prices in margin compression from lower interest rates, competitive pressure from zero-commission rivals, and a de-rating toward the lower end of the historical valuation range. The wide spread, combined with the fact that all recent institutional actions are reiterations rather than upgrades, suggests that analysts are confident in the long-term story but uncertain about near-term catalysts, and the stock's beta of 1.349 means that any shift in sentiment could produce outsized price moves in either direction.
Bulls vs Bears: IBKR Investment Factors
The bull case for IBKR rests on exceptional operational momentum, with 34% account growth and 53% DART growth, coupled with industry-leading margins and a pristine balance sheet. However, the bear case highlights a premium valuation near historical highs, recent revenue miss, and decelerating momentum that could limit upside. The most critical tension is whether IBKR can sustain its premium multiple amid interest rate uncertainty and competitive pressures. Currently, the bull evidence appears stronger due to robust fundamental performance and analyst consensus, but the valuation and recent miss warrant caution. The resolution of interest rate trends and the company's ability to consistently beat elevated expectations will determine the stock's trajectory.
Bullish
- Account Growth Accelerating: Customer accounts grew 34% year over year, with DARTs surging 53% in the most recent monthly metrics. This robust client acquisition and engagement, particularly among sophisticated traders, drives commission revenue and net interest income.
- Exceptional Profitability and Margins: Q2 2026 gross margin reached 95.19% and operating margin 86.39%, reflecting the asset-light, technology-driven model. Net margin improved to 10.57% from 9.07% a year ago, showcasing operating leverage.
- Fortress Balance Sheet: Debt-to-equity is just 0.0035 and current ratio is 1.13, indicating negligible leverage risk. Cash stood at $64.3 billion at the end of Q2 2026, up from $58.5 billion, providing ample liquidity for growth and buybacks.
- Strong Analyst Consensus and Upside: 14 analysts rate IBKR a 'buy' with an average target of $105.40, implying 19.4% upside from $88.30. Recent reiterations from Goldman Sachs, Barclays, and BMO Capital reinforce confidence in the long-term story.
Bearish
- Premium Valuation Limits Upside: Trailing PE of 28.84x and forward PE of 27.59x are near the high end of the historical range (13.70x to 31.09x) and represent a premium to brokerage peers. Price-to-book of 5.34x is also near historical highs, leaving little room for multiple expansion.
- Recent Revenue Miss and Earnings Sensitivity: Q1 2026 revenue missed Wall Street expectations, causing a stock decline. With a very low EPS of $0.034, the PE multiple is sensitive to small earnings fluctuations, and any disappointment could trigger a sharp de-rating.
- Momentum Deceleration and Relative Underperformance: Over the past month, IBKR declined 0.92% and underperformed SPY by 1.51 percentage points; over three months, it fell 3.32% and lagged by 6.66 points. This deceleration suggests a consolidation phase and potential loss of momentum.
- High Beta and Drawdown Risk: Beta of 1.349 means IBKR is 35% more volatile than the market, and the stock has experienced a maximum drawdown of -18.78%. In a market downturn, the stock could significantly underperform.
IBKR Technical Analysis
IBKR is in a sustained uptrend, with the current price of $88.30 representing a 24.45% gain over the past year and a 31.34% rise year-to-date, comfortably outpacing the S&P 500's 15.01% and 12.86% respective gains. The stock is trading at approximately 73.8% of its 52-week range, calculated from a low of $58.95 to a high of $98.75, which places it in the upper-middle portion of its annual band — a zone that reflects healthy momentum but not yet the euphoria of a breakout to new highs. This positioning suggests the stock retains upside room to challenge resistance, though the failure to reclaim the $98.75 peak despite strong fundamental news hints at some supply overhead. Recent momentum has cooled noticeably: the 1-month change is -0.92% and the 3-month change is -3.32%, both diverging sharply from the robust 6-month gain of 30.35% and the 1-year advance of 24.45%. This deceleration is corroborated by relative strength figures, with IBKR underperforming SPY by 1.51 percentage points over the past month and by 6.66 points over three months, even as it outperformed by 13.00 points over six months and 18.48 points year-to-date. The pattern suggests a temporary consolidation or mean-reversion phase within a broader uptrend rather than a trend reversal, though traders should watch whether the 1-month weakness persists into a deeper correction. Key technical support sits near the 52-week low of $58.95, with intermediate support likely around the $85-$86 area where the stock has recently found buyers, while resistance is anchored at the 52-week high of $98.75. A decisive breakout above $98.75 would signal renewed institutional conviction and likely open the door to the $105-$110 zone, whereas a breakdown below $85 could accelerate selling toward the mid-$70s. With a beta of 1.349, IBKR is roughly 35% more volatile than the broader market, meaning position sizing should account for amplified drawdowns — the stock's maximum drawdown of -18.78% over the observed period illustrates this risk, and a short ratio of 3.27 indicates moderate but not extreme bearish positioning.
Beta
1.37
1.37x market volatility
Max Drawdown
-18.8%
Largest decline past year
52-Week Range
$59-$99
Price range past year
Annual Return
+26.6%
Cumulative gain past year
| Period | IBKR Return | S&P 500 |
|---|---|---|
| 1m | -3.9% | +0.6% |
| 3m | -5.8% | +3.6% |
| 6m | +23.2% | +14.6% |
| 1y | +26.6% | +15.8% |
| ytd | +32.5% | +13.6% |
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IBKR Fundamental Analysis
IBKR's revenue trajectory remains firmly positive, with Q2 2026 revenue of $2.953 billion representing 19.6% year-over-year growth from $2.469 billion in Q2 2025. The multi-quarter trend shows consistent expansion: revenue climbed from $2.310 billion in Q1 2025 to $2.421 billion in Q4 2024, then to $2.701 billion in Q1 2026 and $2.953 billion in Q2 2026, reflecting steady sequential gains. Commission revenue of $673 million is the largest identifiable segment, supported by market data fees of $23 million, risk exposure fees of $25 million, payment for order flow of $18 million, and other income of $11 million, though the bulk of revenue derives from net interest income tied to customer balances and margin lending. The growth trend implies a durable investment case built on account acquisition and engagement, but the Q1 2026 revenue miss reported in April shows that even strong operational metrics can fall short of elevated expectations. Profitability is robust, with Q2 2026 net income of $312 million and a net margin of 10.57%, up from $224 million and 9.07% in the year-ago quarter. Gross margin stands at an exceptional 95.19% in Q2 2026, reflecting the asset-light, technology-driven nature of the brokerage model, while the operating margin of 86.39% underscores significant operating leverage. The net income ratio has improved from 9.07% in Q2 2025 to 10.57% in Q2 2026, and EBITDA of $2.578 billion with an EBITDA ratio of 87.30% confirms that core operations are highly cash-generative. The balance sheet is exceptionally conservative, with a debt-to-equity ratio of just 0.0035 and a current ratio of 1.13, indicating negligible leverage risk. Free cash flow on a trailing-twelve-month basis is $15.834 billion, and Q2 2026 operating cash flow was $6.216 billion against capital expenditures of only $18 million, demonstrating that the company funds growth internally with ease. Cash at the end of Q2 2026 stood at $64.305 billion, up from $58.499 billion at the start of the quarter, while ROE of 18.35% and ROA of 2.28% reflect efficient capital deployment. The dividend yield of 0.47% with a payout ratio of 13.62% leaves ample room for reinvestment, buybacks, and strategic flexibility.
Quarterly Revenue
$3.0B
2026-06
Revenue YoY Growth
+19.6%
YoY Comparison
Gross Margin
95.2%
Latest Quarter
Free Cash Flow
$15.8B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is IBKR Overvalued?
Because IBKR is solidly profitable with trailing net income of $312 million in the most recent quarter and positive EPS of $0.034, the PE ratio is the appropriate primary valuation metric. The trailing PE stands at 28.84x, while the forward PE of 27.59x implies only a modest 4.3% compression, suggesting the market expects earnings growth to be steady but not explosive. The PEG ratio of 1.05 is close to 1.0, which conventionally signals a fairly valued growth stock, though the very low absolute EPS figure of $0.034 makes the PE multiple sensitive to small earnings fluctuations. Relative to the broader financial services sector, IBKR's trailing PE of 28.84x and forward PE of 27.59x represent a premium to typical brokerage and investment services peers, which often trade in the mid-to-high teens. The price-to-book ratio of 5.34x and price-to-sales ratio of 2.80x further underscore the premium, though the net margin of 9.62% and gross margin of 89.78% justify some of this premium given the company's superior profitability and technology moat. The EV/EBITDA of 11.68x is more moderate and suggests that on an enterprise basis, the valuation is not stretched relative to cash generation, while the dividend yield of 0.47% is modest but sustainable with a payout ratio of just 13.62%. Historically, IBKR's PE ratio has ranged from a low of 13.70x in Q4 2022 to a high of 31.09x in Q2 2026, with the current 28.84x sitting near the upper end of that band. The price-to-book ratio of 5.34x is also near its historical high, well above the 2.53x seen in Q4 2023 and the 3.48x in Q2 2024, indicating that the market is pricing in optimistic expectations for continued account growth and margin expansion. This historical context suggests that while the premium is supported by genuine operational momentum, there is limited room for multiple expansion, and any earnings disappointment could trigger a sharp de-rating toward the mid-range of the historical PE band.
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 and operational risks for IBKR are relatively low given its fortress balance sheet, with a debt-to-equity ratio of just 0.0035 and a current ratio of 1.13. However, the company's revenue is heavily dependent on net interest income, which is sensitive to interest rate changes; a decline in rates could compress margins. Additionally, the Q1 2026 revenue miss highlights the risk of earnings volatility despite strong operational metrics. The low absolute EPS of $0.034 makes the PE multiple sensitive to small earnings fluctuations, potentially leading to sharp price swings. Market and competitive risks include the premium valuation, with a trailing PE of 28.84x and price-to-book of 5.34x, both near historical highs, leaving little room for multiple expansion. The brokerage industry is highly competitive, with zero-commission rivals like Robinhood and Webull gaining traction, though IBKR's focus on sophisticated clients provides some insulation. Regulatory changes, such as the elimination of the PDT rule, present opportunities but also could increase competition. The stock's beta of 1.349 indicates higher volatility than the market, and sector rotation could impact performance. In a worst-case scenario, a combination of falling interest rates, increased competition, and a market downturn could lead to a de-rating. The 52-week low is $58.95, representing a 33.2% decline from the current price of $88.30. The analyst low target of $70.00 implies a 20.7% downside. If earnings disappoint and the PE compresses to the historical low of 13.70x, the stock could fall significantly. Investors could lose 20-30% from current levels in a severe adverse scenario.
FAQ
The most severe risk is interest rate sensitivity: a significant portion of revenue comes from net interest income, and falling rates could compress margins. Second, competitive pressures from zero-commission brokers like Robinhood and Webull could erode market share, though IBKR's focus on sophisticated clients provides some protection. Third, the premium valuation leaves little room for error; an earnings miss could trigger a sharp de-rating, as seen after Q1 2026. Fourth, the stock's high beta (1.349) means it could underperform in a market downturn. Finally, regulatory changes could impact operations, though the PDT rule elimination is currently a tailwind.
Our 12-month forecast has a base case (50% probability) targeting $95-110, assuming steady revenue growth of 15-20% and stable interest rates. The bull case (30%) targets $105-121 if account growth accelerates and multiple expands. The bear case (20%) targets $58.95-70 if interest rates fall and competition intensifies. The most likely scenario is the base case, hinging on IBKR maintaining its growth trajectory and meeting elevated expectations. Analyst consensus average target is $105.40, aligning with our base case.
IBKR trades at a trailing PE of 28.84x and forward PE of 27.59x, near the high end of its historical range (13.70x to 31.09x) and at a premium to brokerage peers. The price-to-book ratio of 5.34x is also near historical highs. However, the PEG ratio of 1.05 suggests the premium is justified by expected growth. The market is pricing in continued account growth and margin expansion. Relative to its own history, the stock is overvalued, but relative to its growth prospects, it is fairly valued. A pullback to the mid-$70s would represent a more attractive entry point.
IBKR offers a compelling risk/reward for long-term investors, with a consensus analyst target of $105.40 implying 19.4% upside. The company's 34% account growth and 53% DART growth demonstrate strong operational momentum, while its 95% gross margin and debt-free balance sheet provide stability. However, the premium valuation (PE 28.84x) and recent revenue miss introduce risk. The biggest downside risk is a de-rating to the analyst low target of $70, representing 21% downside. For investors with a long-term horizon and tolerance for volatility, IBKR is a good buy on dips, but near current levels, it may be prudent to accumulate gradually.
IBKR is best suited for long-term investment, given its strong fundamentals, consistent account growth, and technology-driven competitive advantage. The stock's high beta (1.349) and recent momentum deceleration make it less ideal for short-term trading, as it can experience significant drawdowns (max drawdown -18.78%). The dividend yield is low (0.47%), so income is not a primary return driver. A minimum holding period of 2-3 years is recommended to ride out volatility and benefit from compounding growth. Short-term traders might exploit swings between support at $85 and resistance at $98.75, but this requires active monitoring.