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TD Ameritrade (AMTD) Rallies 11.9% QTD: Is More Upside Left?
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During the last earnings season, performance of the financial stocks was decent. One such investment bank — TD Ameritrade Holding Corporation (AMTD - Free Report) — has rallied 11.9% quarter to date, significantly outperforming the industry’s slight gain of 1.1%.
This price performance is backed by the gradually improving operating environment and rate hike scenario, which is beneficial for brokerage business. Furthermore, anticipated improvement in trading activities and several of its ongoing initiatives bode well for TD Ameritrade.
Moreover, estimates for this Zacks Rank #2 (Buy) stock have been on an upswing. Over the last 60 days, the Zacks Consensus Estimate has moved up 2.7% and 1.6% for fiscal 2018 and fiscal 2019, respectively.
TD Ameritrade’s debt/equity ratio is 0.35 compared with the S&P 500 average of 0.69, displaying low debt burden relative to the industry. It highlights the financial stability of the company even in an unstable economic environment.
Also, TD Ameritrade’s ROE of 18.27% compared with the industry average of 10.07%, indicates the company’s commendable position over its peers.
Fundamentally, TD Ameritrade’s earnings have jumped 9.3% annually over the last three to five years. The earnings growth momentum is anticipated to continue in the near term as well. The company’s projected EPS (earnings per share) growth (F1/F0) is 65.2% for fiscal 2018 and (F2/F1) nearly 24% for fiscal 2019.
TD Ameritrade’s trading volumes have been displaying an uptrend in the last few years with an increase in average client trades per day. We believe that in the near term, the company will be able to grow its trading volumes due to expected improvement in equity markets, rising rate environment as well as its innovative trading platforms. Additionally, the company continues to undertake investment spending in technology and advertising that are likely to enhance the overall business.
Further, with a rise in rates, brokerage firms are likely to engage in more investment activities. As brokerage firms earn interest income on un-invested cash in customer accounts, the rate hikes will enable these firms to invest at higher rates. As TD Ameritrade currently derives nearly 35% of its total asset-based revenues from net interest income, the company is poised to benefit from the recent rate hikes.
Additionally, TD Ameritrade remains a leading asset gatherer with nine consecutive years of double-digit asset growth since fiscal 2008 in net new client assets. Also, the company’s net revenues have been improving as it recorded 5.6% compound annual growth rate over the last four years ending fiscal 2017. Based on the company’s solid business model, focus on high net-worth clients and improving service model to boost engagement and retention, we expect TD Ameritrade to experience significant top-line growth in the future as well.
Interactive Brokers’ earnings estimates have been revised around 1% upward for 2018, in the past 30 days. Also, its share price has surged 41.6% in six months’ time.
E*TRADE’s earnings estimates for 2018 have been revised nearly 1% upward, over the last 60 days. Further, in six months’ time, the company’s shares have jumped 22.8%.
Stifel Financial witnessed slight upward earnings estimates revision for the current year, in the past two months. Moreover, over the past six months, its shares have gained 7.1%.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Image: Bigstock
TD Ameritrade (AMTD) Rallies 11.9% QTD: Is More Upside Left?
During the last earnings season, performance of the financial stocks was decent. One such investment bank — TD Ameritrade Holding Corporation (AMTD - Free Report) — has rallied 11.9% quarter to date, significantly outperforming the industry’s slight gain of 1.1%.
This price performance is backed by the gradually improving operating environment and rate hike scenario, which is beneficial for brokerage business. Furthermore, anticipated improvement in trading activities and several of its ongoing initiatives bode well for TD Ameritrade.
Moreover, estimates for this Zacks Rank #2 (Buy) stock have been on an upswing. Over the last 60 days, the Zacks Consensus Estimate has moved up 2.7% and 1.6% for fiscal 2018 and fiscal 2019, respectively.
TD Ameritrade’s debt/equity ratio is 0.35 compared with the S&P 500 average of 0.69, displaying low debt burden relative to the industry. It highlights the financial stability of the company even in an unstable economic environment.
Also, TD Ameritrade’s ROE of 18.27% compared with the industry average of 10.07%, indicates the company’s commendable position over its peers.
Fundamentally, TD Ameritrade’s earnings have jumped 9.3% annually over the last three to five years. The earnings growth momentum is anticipated to continue in the near term as well. The company’s projected EPS (earnings per share) growth (F1/F0) is 65.2% for fiscal 2018 and (F2/F1) nearly 24% for fiscal 2019.
TD Ameritrade’s trading volumes have been displaying an uptrend in the last few years with an increase in average client trades per day. We believe that in the near term, the company will be able to grow its trading volumes due to expected improvement in equity markets, rising rate environment as well as its innovative trading platforms. Additionally, the company continues to undertake investment spending in technology and advertising that are likely to enhance the overall business.
Further, with a rise in rates, brokerage firms are likely to engage in more investment activities. As brokerage firms earn interest income on un-invested cash in customer accounts, the rate hikes will enable these firms to invest at higher rates. As TD Ameritrade currently derives nearly 35% of its total asset-based revenues from net interest income, the company is poised to benefit from the recent rate hikes.
Additionally, TD Ameritrade remains a leading asset gatherer with nine consecutive years of double-digit asset growth since fiscal 2008 in net new client assets. Also, the company’s net revenues have been improving as it recorded 5.6% compound annual growth rate over the last four years ending fiscal 2017. Based on the company’s solid business model, focus on high net-worth clients and improving service model to boost engagement and retention, we expect TD Ameritrade to experience significant top-line growth in the future as well.
Other Stocks to Consider
Other top-ranked stocks in the same space include Interactive Brokers Group, Inc. (IBKR - Free Report) , E*TRADE Financial Corporation and Stifel Financial Corporation (SF - Free Report) . All the stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Interactive Brokers’ earnings estimates have been revised around 1% upward for 2018, in the past 30 days. Also, its share price has surged 41.6% in six months’ time.
E*TRADE’s earnings estimates for 2018 have been revised nearly 1% upward, over the last 60 days. Further, in six months’ time, the company’s shares have jumped 22.8%.
Stifel Financial witnessed slight upward earnings estimates revision for the current year, in the past two months. Moreover, over the past six months, its shares have gained 7.1%.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>