Interactive Brokers Group, Inc.

**Technical Analysis**

IBKR shows strong momentum, having recovered substantially from its 52-week low and currently trading near its 52-week high. However, the stock appears overbought in the short term, as evidenced by a slight pullback in recent weeks and a relatively high beta indicating above-market volatility. While long-term momentum remains positive, investors should expect near-term consolidation.

**Fundamental Analysis**

The company maintains stable revenue growth and exceptional operating margins, supported by a debt-free balance sheet. However, profitability is tempered by sizable interest expenses typical of its brokerage model. Operational metrics reflect the capital-intensive nature of the business, with low asset turnover offset by solid returns on equity.

**Valuation**

Valuation sends mixed signals: a forward P/E of 25 suggests growth expectations are priced in, while a trailing P/E of 8 hints at underlying value. The absence of peer comparison data makes it difficult to judge relative attractiveness. Overall, the stock may be fairly—if not fully—valued given its recent price appreciation.

**Risk Assessment**

IBKR carries above-average volatility risk, with a beta over 1.2 and a history of sharp drawdowns. Its brokerage model also entails sector-specific liquidity and operational risks. That said, negligible short interest suggests limited bearish sentiment at present.

**Investment Recommendation**

Consider Buying on Pullbacks. IBKR demonstrates strong operational health and industry-leading margins, but its current price reflects much of the near-term optimism. Investors may find better entry points during market dips, given the stock’s volatility and technically overbought condition. For long-term holders, its robust fundamentals and clean balance sheet support a positive outlook.

*This is not investment advice. Please conduct your own research or consult a financial advisor.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, the 12-month outlook for IBKR is cautiously optimistic. Key catalysts for upside include its robust operational health, industry-leading margins, and a debt-free balance sheet that provides financial flexibility. The primary risks are its above-average volatility and the potential for a near-term price consolidation after its strong run, given the technically overbought condition and the capital-intensive nature of its business limiting explosive growth. With no specific analyst target provided, a reasonable target price range would be in the mid-$70s to low-$80s, contingent on the company maintaining its strong execution and the market providing a more attractive entry point than the current level.

Wall Street Consensus

Most Wall Street analysts are optimistic about Interactive Brokers Group, Inc.'s 12-month outlook, with consensus target around $73.99, indicating expected upside potential.

Overall, IBKR has investment potential but also faces challenges. Here are key factors to weigh before investing.

IBKR has demonstrated robust recovery performance over the past year, rallying significantly from its 52-week low despite recent short-term consolidation near its 52-week high.

Over the last three months, IBKR has gained 3.41% and modestly outperformed the market by 3.43%, though its one-month performance shows a slight decline of -0.53%, suggesting near-term consolidation after a strong run. The stock's higher beta of 1.224 confirms it is more volatile than the broader market.

Currently trading at $73.29, IBKR is positioned near the top of its 52-week range ($32.82 - $79.18), approximately 7.5% below its high. Given this proximity to the peak and the substantial recovery from last year's -38.74% drawdown, the stock appears technically overbought in the short term.

Revenue & Profitability IBKR demonstrates stable revenue growth with Q4 2025 revenue of $2.75 billion, up slightly from $2.70 billion in Q3. The company maintains exceptional operating efficiency with an 87.5% operating margin, though net profitability remains constrained at 10.3% due to substantial interest expenses. This pattern reflects IBKR's brokerage model where high interest income is largely offset by corresponding interest payments to clients.

Financial Health The company exhibits minimal leverage with a negligible debt ratio of 0.00009 and debt-to-equity of 0.0035, indicating a conservatively capitalized balance sheet. However, liquidity metrics show a current ratio of 0.61 and low cash ratio of 0.03, which is typical for brokerages holding client assets rather than corporate cash. The interest coverage ratio of 2.18 provides adequate cushion for debt servicing.

Operational Efficiency IBKR's operational efficiency is mixed, with a respectable 5.3% return on equity but very low asset turnover of 0.014, characteristic of capital-intensive brokerage operations. The extremely long cash conversion cycle of -53,965 days reflects the nature of its business model involving client margin accounts. The equity multiplier of 37.9 indicates significant leverage through client trading activities rather than corporate debt.

Valuation Level: The stock presents a conflicting valuation picture based on forward-looking versus trailing metrics. The forward PE of 25.2 suggests a significant premium based on expected future earnings, which is further supported by the elevated EV/EBITDA of 43.7. However, the much lower trailing PE of 8.34 and the high PEG ratio near 3.0 indicate that the market's growth expectations may already be fully priced in, pointing to potential overvaluation relative to its historical earnings and growth rate.

Peer Comparison: A direct comparison against industry averages cannot be accurately performed as industry data is unavailable. For a precise valuation assessment, benchmarking these metrics—particularly the PE and PB ratios—against the peer group is essential to determine if the stock's valuation is in line with or deviates from sector norms.

Volatility Risk: IBKR's beta of 1.224 indicates it is moderately more volatile than the broader market, exposing investors to heightened swings. This elevated risk profile is confirmed by the substantial 1-year maximum drawdown of -38.74%, underscoring the potential for significant capital depreciation during adverse market conditions.

Other Risks: While the absence of significant short interest suggests the market is not heavily betting against the stock, investors should remain vigilant of broader market and sector-specific risks. Liquidity and operational risks inherent to the brokerage industry also persist, though the lack of short interest mitigates one potential source of downward pressure.