Morningstar

Interactive Brokers Group Inc Class A IBKR

Morningstar Rating
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Stock XNAS Rating as of
$138.11 +0.54 (0.39%)
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As of Cboe BZX Real-Time Price Open

Company Report

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Interactive Brokers: Increasing Our Fair Value Estimate by 19%

Michael Wong

We are increasing our fair value estimate for narrow-moat-rated Interactive Brokers to $140 per share from $118. This amounts to about 22 times our forward earnings per share estimate and 4 times price/2023 book value. Of the $22 increase, about $6 is from earnings since our previous valuation update, $5 is from increasing our revenue forecast, and $11 is from increasing our operating margin forecast.

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Price vs Fair Value

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IBKR is trading at a 682% premium.
Price
$137.53
Fair Value
$386.00
Uncertainty
High
1-Star Price
$228.00
5-Star Price
$45.00
Economic Moat
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Capital Allocation
Hrzysjs

Bulls Say, Bears Say

Bulls

Interactive Brokers’ short duration in its investment portfolio benefits from high interest rates.

Bears

Lower interest rates for an extended period would be detrimental to Interactive Brokers’ net interest income. If a recession occurs, the Federal Reserve might feel obligated to lower rates swiftly.

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News

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Trading Information

Previous Close Price
$137.57
Day Range
$137.48–139.10
52-Week Range
$72.58–139.10
Bid/Ask
$137.89 / $138.14
Market Cap
$15.03 Bil
Volume/Avg
151,496 / 923,704

Key Statistics

Price/Earnings (Normalized)
21.26
Price/Sales
1.72
Dividend Yield (Trailing)
0.51%
Dividend Yield (Forward)
0.73%
Total Yield
0.51%

Company Profile

Interactive Brokers is an online brokerage that generates trading commissions (around 31% of net revenue) from facilitating trading in a wide range of products, including equity, options, futures, foreign exchange, bonds, mutual funds, and exchange-traded funds. Interactive Brokers also generates net interest income (about 64% of net revenue) from idle client cash and earns fees (about 6% of net revenue) from ancillary services. Principal trading and other miscellaneous activities are small (about 5% of net revenue). The firm derives about 70% of its net revenue from the US and 30% from international markets.
Sector
Financial Services
Industry
Capital Markets
Stock Style Box
Mid Growth
Total Number of Employees
2,951
Website
https://www.interactivebrokers.com

Competitors

Valuation

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Metric
IBKR
SCHW
MS
Price/Earnings (Normalized)
 21.2622.0216.19
Price/Book Value
 3.803.391.83
Price/Sales
 1.726.373.21
Price/Cash Flow
 4.4415.6410.07
Price/Earnings
IBKR
SCHW
MS

Financial Strength

Metric
IBKR
SCHW
MS
Quick Ratio
 0.51——
Current Ratio
 1.00——
Interest Coverage
 1.87——
Quick Ratio
IBKR
SCHW
MS

Profitability

Metric
IBKR
SCHW
MS
Return on Assets (Normalized)
 0.55%1.12%1.06%
Return on Equity (Normalized)
 19.62%17.15%13.95%
Return on Invested Capital (Normalized)
 30.69%——
Return on Assets
IBKR
SCHW
MS

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