It has been about a month since the last earnings report for Interactive Brokers Group, Inc. (IBKR Quick QuoteIBKR - Free Report) . Shares have lost about 18.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Interactive Brokers Group, Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Interactive Brokers Q1 Earnings Miss, Revenues & Expenses Decline

Interactive Brokers’ first-quarter 2022 adjusted earnings per share of 82 cents missed the Zacks Consensus Estimate by a penny. The bottom line reflects a decline of 16.3% from the prior-year quarter.

The company recorded a decline in revenues in the quarter under review. A fall in DARTs further hurt results. However, the capital position remained strong. Lower expenses were a tailwind.

After considering non-recurring items, net income available to common shareholders (GAAP basis) was $73 million or 74 cents per share, down from $107 million or $1.16 per share in the prior-year quarter.

Interactive Brokers reported comprehensive income available to common shareholders of $63 million or 64 cents per share compared with $90 million or 98 cents per share in the prior-year quarter.

Revenues & Expenses Decline

Total GAAP net revenues were $645 million, down 27.8% year over year. The top line missed the Zacks Consensus Estimate of $705 million. Adjusted net revenues were $692 million, down 13.1%.

Total non-interest expenses declined 1.2% year over year to $251 million. The fall was due to a decrease in general and administrative costs, and customer bad debt.

Income before income taxes was $394 million, down 38.3% from the prior-year quarter.

The adjusted pre-tax profit margin was 64%, down from 68% a year ago.

In the reported quarter, total customer DARTs declined 24% year over year to 2.52 million. Total cleared DARTs decreased from 2.96 million to 2.23 million.

Customer accounts grew 36% from the year-ago quarter to 1,809,000.

Capital Position Strong

As of Mar 31, 2022, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $51.60 billion compared with $40.40 billion as of Dec 31, 2021.

As of Mar 31, 2022, total assets were $114.42 billion compared with $109.11 billion as of Dec 31, 2021. Total equity was $10.48 billion, up from $10.22 billion as of Dec 31, 2021.

Outlook

The company expects the next 25-bps rise in interest rates to produce an additional $124 million in net interest income annually. Given that the current market expectations include larger rate increases, a 50-bps rise in rates will likely produce an additional $175 million annually.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Interactive Brokers Group, Inc. has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision has been net zero. Notably, Interactive Brokers Group, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.