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Why Is Interactive Brokers Group, Inc. (IBKR) Up 15.1% Since Last Earnings Report?
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A month has gone by since the last earnings report for Interactive Brokers Group, Inc. (IBKR - Free Report) . Shares have added about 15.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Interactive Brokers Group, Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Interactive Brokers Q2 Earnings & Revenues Miss Estimates, Costs Up
Interactive Brokers’ second-quarter 2022 adjusted earnings per share of 84 cents missed the Zacks Consensus Estimate of 91 cents. The bottom line reflects a rise of 2.4% from the prior-year quarter.
The company recorded a decline in revenues and higher expenses in the quarter under review. A fall in DARTs further hurt the results. However, the capital position remained strong.
After considering non-recurring items, net income available to common shareholders (GAAP basis) was $72 million or 72 cents per share, down from $92 million or $1.00 per share in the prior-year quarter.
Interactive Brokers reported comprehensive income available to common shareholders of $48 million or 47 cents per share compared with $97 million or $1.05 per share in the prior-year quarter.
Revenues Decline, Expenses Rise
Total GAAP net revenues were $656 million, down 13% year over year. The top line missed the Zacks Consensus Estimate of $723.3 million. Adjusted net revenues were $717 million, up 10.3%.
Total non-interest expenses increased 23.9% year over year to $264 million. The rise was due to an increase in almost all cost components except for customer bad debt.
Income before income taxes was $392 million, down 27.5% from the prior-year quarter.
The adjusted pre-tax profit margin was 63%, down from 67% a year ago.
In the reported quarter, total customer DARTs declined 5.7% year over year to 2.17 million. Total cleared DARTs decreased from 2.08 million to 1.93 million.
Customer accounts grew 36% from the year-ago quarter to 1,923,000.
Capital Position Strong
As of Jun 30, 2022, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $57.13 billion compared with $40.40 billion as of Dec 31, 2021.
As of Jun 30, 2022, total assets were $113.31 billion compared with $109.11 billion as of Dec 31, 2021. Total equity was $10.60 billion, up from $10.22 billion as of Dec 31, 2021.
Outlook
Given market expectations of more rate hikes to come, management anticipates the effects of increases in the Fed Funds rate to result in additional annual net interest income (NII) will be as follows: at 25 basis points (bps) an increase of $57 million; at 50 bps an increase of $115 million; at 75 bps an increase of $172 million; and at 100 bps an increase of $229 million.
Further, the company assumes that a 25 bps increase in all the relevant non-USD benchmark rates will lead to an additional annual NII of $10 million, rising to nearly $40 million at a 100 bps rate increase.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, Interactive Brokers Group, Inc. has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Interactive Brokers Group, Inc. has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Interactive Brokers Group, Inc. belongs to the Zacks Financial - Investment Bank industry. Another stock from the same industry, The Charles Schwab Corporation (SCHW - Free Report) , has gained 20.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.
The Charles Schwab Corporation reported revenues of $5.09 billion in the last reported quarter, representing a year-over-year change of +12.5%. EPS of $0.97 for the same period compares with $0.70 a year ago.
The Charles Schwab Corporation is expected to post earnings of $1.05 per share for the current quarter, representing a year-over-year change of +25%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.6%.
The Charles Schwab Corporation has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Why Is Interactive Brokers Group, Inc. (IBKR) Up 15.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Interactive Brokers Group, Inc. (IBKR - Free Report) . Shares have added about 15.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Interactive Brokers Group, Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Interactive Brokers Q2 Earnings & Revenues Miss Estimates, Costs Up
Interactive Brokers’ second-quarter 2022 adjusted earnings per share of 84 cents missed the Zacks Consensus Estimate of 91 cents. The bottom line reflects a rise of 2.4% from the prior-year quarter.
The company recorded a decline in revenues and higher expenses in the quarter under review. A fall in DARTs further hurt the results. However, the capital position remained strong.
After considering non-recurring items, net income available to common shareholders (GAAP basis) was $72 million or 72 cents per share, down from $92 million or $1.00 per share in the prior-year quarter.
Interactive Brokers reported comprehensive income available to common shareholders of $48 million or 47 cents per share compared with $97 million or $1.05 per share in the prior-year quarter.
Revenues Decline, Expenses Rise
Total GAAP net revenues were $656 million, down 13% year over year. The top line missed the Zacks Consensus Estimate of $723.3 million. Adjusted net revenues were $717 million, up 10.3%.
Total non-interest expenses increased 23.9% year over year to $264 million. The rise was due to an increase in almost all cost components except for customer bad debt.
Income before income taxes was $392 million, down 27.5% from the prior-year quarter.
The adjusted pre-tax profit margin was 63%, down from 67% a year ago.
In the reported quarter, total customer DARTs declined 5.7% year over year to 2.17 million. Total cleared DARTs decreased from 2.08 million to 1.93 million.
Customer accounts grew 36% from the year-ago quarter to 1,923,000.
Capital Position Strong
As of Jun 30, 2022, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $57.13 billion compared with $40.40 billion as of Dec 31, 2021.
As of Jun 30, 2022, total assets were $113.31 billion compared with $109.11 billion as of Dec 31, 2021. Total equity was $10.60 billion, up from $10.22 billion as of Dec 31, 2021.
Outlook
Given market expectations of more rate hikes to come, management anticipates the effects of increases in the Fed Funds rate to result in additional annual net interest income (NII) will be as follows: at 25 basis points (bps) an increase of $57 million; at 50 bps an increase of $115 million; at 75 bps an increase of $172 million; and at 100 bps an increase of $229 million.
Further, the company assumes that a 25 bps increase in all the relevant non-USD benchmark rates will lead to an additional annual NII of $10 million, rising to nearly $40 million at a 100 bps rate increase.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, Interactive Brokers Group, Inc. has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Interactive Brokers Group, Inc. has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Interactive Brokers Group, Inc. belongs to the Zacks Financial - Investment Bank industry. Another stock from the same industry, The Charles Schwab Corporation (SCHW - Free Report) , has gained 20.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.
The Charles Schwab Corporation reported revenues of $5.09 billion in the last reported quarter, representing a year-over-year change of +12.5%. EPS of $0.97 for the same period compares with $0.70 a year ago.
The Charles Schwab Corporation is expected to post earnings of $1.05 per share for the current quarter, representing a year-over-year change of +25%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.6%.
The Charles Schwab Corporation has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.