Interactive Brokers
IBKR
$89.85
-0.76%
Interactive Brokers Group is a global automated electronic broker and market maker, offering sophisticated trading technology and low-cost execution across a wide range of asset classes to retail and institutional clients. The company is a market leader in the discount brokerage space, known for its best-in-class order execution, global reach (170+ exchanges, 40 countries, 29 currencies), and extremely low margin lending rates, which attract a sophisticated clientele including hedge funds and introducing brokers. The current investor narrative centers on robust account growth (34% YoY) and surging trading volumes (DARTs up 53% YoY), driven by regulatory tailwinds like the elimination of the PDT rule and the rise of prediction markets, while also debating whether the stock's premium valuation is justified by its growth trajectory.…
IBKR
Interactive Brokers
$89.85
Related headlines
Investment Opinion: Should I buy IBKR Today?
Based on the analysis, IBKR is rated a Buy. The company demonstrates strong growth with revenue up 16.9% YoY and account growth of 34%, supported by a favorable regulatory environment. The analyst consensus is 'Buy' with an average target price of $106.13, implying a 15.3% upside from the current price of $92.06. The stock's PE ratio of 28.84x is justified by its PEG ratio of 1.05x, indicating fair value relative to growth. The high gross margin of 89.8% and operating margin of 86.0% highlight operational efficiency, while free cash flow of $16.76 billion TTM provides financial flexibility.
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IBKR 12-Month Price Forecast
The AI assessment is bullish on IBKR, driven by its robust growth metrics and favorable industry tailwinds. The company's ability to grow revenue and accounts at a rapid pace, combined with high profitability, positions it well for continued outperformance. However, the medium confidence reflects the risk of interest rate cuts and competitive pressures. If the company can sustain its growth trajectory and maintain margins, the stock has upside potential. A downgrade to neutral would occur if revenue growth decelerates below 10% or if the PE ratio expands above 35x without corresponding earnings growth.
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 +18.1% versus the current price.
Average Target
$106.13
0 analysts
Implied Upside
+18.1%
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 $121.00 suggests that some analysts anticipate continued strong growth, possibly driven by further market share gains and the positive impact of regulatory changes like the PDT rule elimination. The low target of $70.00 implies concerns about a potential slowdown in trading volumes or margin compression. Recent ratings actions have been consistently positive, with firms like B of A Securities, Barclays, and Goldman Sachs reiterating Buy or Overweight ratings, indicating a stable and supportive analyst community.
Bulls vs Bears: IBKR Investment Factors
Interactive Brokers presents a compelling growth story with strong account growth, robust revenue expansion, and high profitability, supported by favorable regulatory changes. However, the stock trades at a premium valuation, and its earnings are sensitive to interest rate movements and competitive pressures. The bull case is currently stronger, given the company's proven ability to execute and the positive industry tailwinds, but the high valuation leaves little room for error. The key tension is whether the company can sustain its growth trajectory to justify the premium multiple, especially if interest rates decline or competition intensifies.
Bullish
- Strong Account Growth: Customer accounts grew 34% YoY, reaching nearly $780 billion in customer equity by end of 2025. This rapid expansion indicates a growing client base and increasing market share in the discount brokerage space.
- Robust Revenue Growth: Q1 2026 revenue of $2.701 billion, up 16.9% YoY, driven by higher trading volumes (DARTs up 53% YoY) and interest income. The consistent quarterly growth from $2.302 billion in Q2 2024 to $2.701 billion in Q1 2026 demonstrates a strong upward trajectory.
- High Profitability: Gross margin stands at 89.8%, and operating margin at 86.0%, reflecting the company's efficient cost structure and high-margin business model. Net margin of 9.6% is solid for a brokerage, with ROE at 18.3%.
- Regulatory Tailwinds: The elimination of the PDT rule and the rise of prediction markets are expected to boost retail trading activity, benefiting IBKR. This regulatory change removes a barrier for smaller accounts, potentially driving further volume growth.
Bearish
- High Valuation: The trailing PE is 28.84x and forward PE is 28.92x, which is a premium to the broader market. The PEG ratio of 1.05x suggests fair value relative to growth, but any earnings miss could trigger a de-rating.
- Interest Rate Sensitivity: A significant portion of revenue comes from interest income ($1.947 billion in Q1 2026). If the Fed cuts rates, net interest margins could compress, directly impacting profitability. The company's earnings are highly sensitive to rate changes.
- Recent Price Volatility: The stock has a beta of 1.343, indicating higher volatility than the market. In the last month, it dropped 5.5%, and the max drawdown over the past year was -18.78%, showing that the stock can experience sharp pullbacks.
- Competitive Pressure: The discount brokerage space is highly competitive, with rivals like Robinhood and Webull also benefiting from the PDT rule change. These competitors may offer more user-friendly platforms, potentially limiting IBKR's market share gains.
IBKR Technical Analysis
Interactive Brokers has been in a strong uptrend over the past year, with the stock price up 44.0% over the last 12 months, significantly outperforming the S&P 500's 20.4% gain. The current price of $92.06 sits at 94.1% of its 52-week range (between $58.95 low and $97.84 high), indicating the stock is trading near its highs, reflecting strong momentum and investor optimism. This positioning suggests the market is rewarding the company's growth, but also leaves limited room for disappointment, as any negative news could trigger profit-taking.
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
+43.9%
Cumulative gain past year
| Period | IBKR Return | S&P 500 |
|---|---|---|
| 1m | -4.8% | +1.9% |
| 3m | +10.4% | +2.3% |
| 6m | +20.8% | +10.6% |
| 1y | +43.9% | +19.5% |
| ytd | +33.6% | +11.8% |
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IBKR Fundamental Analysis
Interactive Brokers' revenue has been growing steadily, with Q1 2026 revenue of $2.701 billion, up 16.9% YoY from $2.310 billion in Q1 2025. The multi-quarter trend shows consistent acceleration, with revenue growing from $2.302 billion in Q2 2024 to $2.701 billion in Q1 2026, representing a compound quarterly growth rate of 2.7%. The growth is driven by strong commission income ($613 million in Q1 2026) and interest income ($1.947 billion), reflecting higher trading volumes and rising interest rates. This robust top-line growth supports the investment case for a company benefiting from increased market activity and its global expansion.
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, the PE ratio is the primary valuation metric. The trailing PE is 28.84x, while the forward PE is 28.92x, indicating that the market expects earnings to remain stable in the near term. The PEG ratio of 1.05x suggests the stock is fairly valued relative to its expected earnings growth, which is a positive sign for investors looking for growth at a reasonable price.
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 dependence on interest income, which comprised over 70% of Q1 2026 revenue. If the Federal Reserve cuts rates, net interest margins could compress, reducing profitability. The company's debt-to-equity ratio is very low at 0.35%, indicating minimal leverage risk, but its current ratio of 1.13 suggests adequate liquidity. However, the payout ratio of 13.6% and dividend yield of 0.47% indicate limited income return, which may not attract income-focused investors. The free cash flow is strong at $16.76 billion TTM, providing a cushion for operations and growth investments.