We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
At a glance, Interactive Brokers Group, Inc. (IBKR - Free Report) stock appears to be trading at a premium when compared with the industry at large. The company’s current forward 12-month price/earnings (P/E) ratio of 31.03 is above the industry average of 14.75. Also, IBKR’s P/E (F12M) ratio is somewhat near its high over the past five years, which suggests some level of overvalued trading compared with historical norms.
If we compare IBKR’s current valuation with two of its closest peers, Robinhood Markets, Inc. (HOOD - Free Report) and Charles Schwab (SCHW - Free Report) , it appears that while IBKR is overvalued compared with Schwab, it is favorably priced compared with Robinhood.
Schwab has a P/E (F12M) ratio of 18.10 and Robinhood has a forward 12-month P/E ratio of 66.35.
IBKR’s P/E (F12M) Ratio
Image Source: Zacks Investment Research
Thus, despite being a prominent name in the electronic brokerage market, IBKR’s not-so-favorable valuation may compel investors to stay away from the stock. This is primarily because, in the case of worsening of industry conditions, premium stocks are at risk of valuation reversion to the mean, which results in sharp declines in the stock’s price.
However, investors should not avoid IBKR completely just because of its premium valuation. Before making any investment decision, it is advisable to look at the company’s fundamentals and growth prospects to see if the higher valuation is justified or not.
Factors Aiding Interactive Brokers’ Growth
Product Diversification Efforts: Interactive Brokers has continuously been making efforts to expand the product suite and reach of its services. Last month, it introduced Connections, a new feature designed to help investors discover trading opportunities and evaluate investments by highlighting related ideas across global markets. Also, it launched zero-commission U.S. stock trading in Singapore.
This July, IBKR launched NISA accounts to help Japanese investors build wealth tax-free. In May, it extended the trading hours for Forecast Contracts to nearly 24 hours a day and in April, it launched the prediction markets hub in Canada.
Last year, IBKR introduced Plan d’Epargne en Actions accounts to boost its offerings for its French clients. The launch of IBKR GlobalTrader has enabled investors worldwide to trade stocks through mobile applications. Moreover, IBKR was one of the first brokers to introduce Overnight Trading on U.S. stocks and ETFs nearly 24 hours a day, five days a week.
Likewise, the launch of Impact Dashboard, an innovative sustainable investing tool, has made the company the first major brokerage firm to allow investors to easily align their portfolio with their values. Also, IBKR launched cryptocurrency trading via Paxos Trust Company, charging commissions that are lower than other crypto exchanges. The introduction of IBKR Desktop, the next-generation desktop trading application for Windows and Mac, further marks a new chapter for innovation.
Continued product diversification efforts will help the company expand market share and global footprint, thereby supporting top-line growth.
Technological Excellence: Interactive Brokers’ technological superiority is one of its strongest aspects. The company processes trades in stocks, digital assets, futures, options and forex on more than 160 exchanges across several countries and currencies.
Unlike many of its peers, IBKR has a very low level of compensation expenses relative to net revenues (10.9% in the first half of 2025). This helps the company generate solid growth. Further, Interactive Brokers has been emphasizing developing proprietary software to automate broker-dealer functions, leading to a steady rise in revenues. Over the last five years (2019-2024), total net revenues witnessed a compound annual growth rate (CAGR) of 21.8%, with the upward momentum continuing in the first half of 2025.
IBKR also has a robust Daily Average Revenue Trades (DARTs) number, which, along with a favorable trading backdrop, is expected to keep driving the top line. The company’s technological superiority, combined with easier regulations to improve product velocity, will likely help its net revenues through higher client acquisitions.
The Zacks Consensus Estimate for IBKR’s 2025 and 2026 revenues is $5.68 billion and $6.05 billion, which indicates year-over-year growth of 8.9% and 6.4%, respectively.
Sales Estimates
Image Source: Zacks Investment Research
Efficient Capital Distributions: While Interactive Brokers was consistent with its dividend payment for a long time, it hiked its quarterly dividend 150% to 25 cents per share in April 2024. In April 2025, it once again announced a dividend hike of 28% and a four-for-one forward split of its common stock to make shares more accessible to investors.
IBKR uses insignificant debt to finance its operations. Thus, given a solid liquidity position, the company is expected to be able to sustain its dividend payments in the future, thus enhancing shareholder value.
Analyzing IBKR’s Price Performance
So far this year, IBKR shares have gained 43.4%, outperforming the industry and the S&P 500 Index’s 25% and 11.9% rallies, respectively. While the company’s performance compares unfavorably with that of HOOD, its performance has been better than that of SCHW.
Robinhood shares have skyrocketed 216% and the Schwab stock has gained 26.9% year to date.
YTD Price Performance
Image Source: Zacks Investment Research
Final Thoughts on Interactive Brokers Stock
Although a premium valuation compared with the industry makes us apprehensive, Interactive Brokers remains well-positioned for growth in the current volatile operating environment, supported by its strong technological capabilities and diversified product offerings.
Heightened market volatility so far this year, increased client participation, efficient onboarding, global expansion and increased visibility via strategic moves like the stock split and S&P 500 inclusion are factors that have been driving IBKR’s customer accounts of late. The company’s record account growth and operational efficiency deliver a strong competitive edge.
Moreover, if we look at Interactive Brokers’ earnings estimate revisions, it is clear that analysts are bullish on the stock. Over the past 60 days, the Zacks Consensus Estimate for IBKR’s 2025 and 2026 earnings has moved upward. The estimates reflect year-over-year growth rates of 11.4% and 6.1% for 2025 and 2026, respectively.
Earnings Estimate Revision Trend
Image Source: Zacks Investment Research
Thus, for valuation-aware and more conservative investors, it is advisable to maintain caution and look for any signs of slowing growth before making any investment decision. But, for those focused on long-term potential, Interactive Brokers looks like an attractive investment option now. The company’s higher valuation reflects durable advantages and growth, not just investor enthusiasm.
Image: Bigstock
Should You Buy IBKR Stock Despite Its Premium Valuation?
Key Takeaways
At a glance, Interactive Brokers Group, Inc. (IBKR - Free Report) stock appears to be trading at a premium when compared with the industry at large. The company’s current forward 12-month price/earnings (P/E) ratio of 31.03 is above the industry average of 14.75. Also, IBKR’s P/E (F12M) ratio is somewhat near its high over the past five years, which suggests some level of overvalued trading compared with historical norms.
If we compare IBKR’s current valuation with two of its closest peers, Robinhood Markets, Inc. (HOOD - Free Report) and Charles Schwab (SCHW - Free Report) , it appears that while IBKR is overvalued compared with Schwab, it is favorably priced compared with Robinhood.
Schwab has a P/E (F12M) ratio of 18.10 and Robinhood has a forward 12-month P/E ratio of 66.35.
IBKR’s P/E (F12M) Ratio
Image Source: Zacks Investment Research
Thus, despite being a prominent name in the electronic brokerage market, IBKR’s not-so-favorable valuation may compel investors to stay away from the stock. This is primarily because, in the case of worsening of industry conditions, premium stocks are at risk of valuation reversion to the mean, which results in sharp declines in the stock’s price.
However, investors should not avoid IBKR completely just because of its premium valuation. Before making any investment decision, it is advisable to look at the company’s fundamentals and growth prospects to see if the higher valuation is justified or not.
Factors Aiding Interactive Brokers’ Growth
Product Diversification Efforts: Interactive Brokers has continuously been making efforts to expand the product suite and reach of its services. Last month, it introduced Connections, a new feature designed to help investors discover trading opportunities and evaluate investments by highlighting related ideas across global markets. Also, it launched zero-commission U.S. stock trading in Singapore.
This July, IBKR launched NISA accounts to help Japanese investors build wealth tax-free. In May, it extended the trading hours for Forecast Contracts to nearly 24 hours a day and in April, it launched the prediction markets hub in Canada.
Last year, IBKR introduced Plan d’Epargne en Actions accounts to boost its offerings for its French clients. The launch of IBKR GlobalTrader has enabled investors worldwide to trade stocks through mobile applications. Moreover, IBKR was one of the first brokers to introduce Overnight Trading on U.S. stocks and ETFs nearly 24 hours a day, five days a week.
Likewise, the launch of Impact Dashboard, an innovative sustainable investing tool, has made the company the first major brokerage firm to allow investors to easily align their portfolio with their values. Also, IBKR launched cryptocurrency trading via Paxos Trust Company, charging commissions that are lower than other crypto exchanges. The introduction of IBKR Desktop, the next-generation desktop trading application for Windows and Mac, further marks a new chapter for innovation.
Continued product diversification efforts will help the company expand market share and global footprint, thereby supporting top-line growth.
Technological Excellence: Interactive Brokers’ technological superiority is one of its strongest aspects. The company processes trades in stocks, digital assets, futures, options and forex on more than 160 exchanges across several countries and currencies.
Unlike many of its peers, IBKR has a very low level of compensation expenses relative to net revenues (10.9% in the first half of 2025). This helps the company generate solid growth. Further, Interactive Brokers has been emphasizing developing proprietary software to automate broker-dealer functions, leading to a steady rise in revenues. Over the last five years (2019-2024), total net revenues witnessed a compound annual growth rate (CAGR) of 21.8%, with the upward momentum continuing in the first half of 2025.
IBKR also has a robust Daily Average Revenue Trades (DARTs) number, which, along with a favorable trading backdrop, is expected to keep driving the top line. The company’s technological superiority, combined with easier regulations to improve product velocity, will likely help its net revenues through higher client acquisitions.
The Zacks Consensus Estimate for IBKR’s 2025 and 2026 revenues is $5.68 billion and $6.05 billion, which indicates year-over-year growth of 8.9% and 6.4%, respectively.
Sales Estimates
Image Source: Zacks Investment Research
Efficient Capital Distributions: While Interactive Brokers was consistent with its dividend payment for a long time, it hiked its quarterly dividend 150% to 25 cents per share in April 2024. In April 2025, it once again announced a dividend hike of 28% and a four-for-one forward split of its common stock to make shares more accessible to investors.
IBKR uses insignificant debt to finance its operations. Thus, given a solid liquidity position, the company is expected to be able to sustain its dividend payments in the future, thus enhancing shareholder value.
Analyzing IBKR’s Price Performance
So far this year, IBKR shares have gained 43.4%, outperforming the industry and the S&P 500 Index’s 25% and 11.9% rallies, respectively. While the company’s performance compares unfavorably with that of HOOD, its performance has been better than that of SCHW.
Robinhood shares have skyrocketed 216% and the Schwab stock has gained 26.9% year to date.
YTD Price Performance
Image Source: Zacks Investment Research
Final Thoughts on Interactive Brokers Stock
Although a premium valuation compared with the industry makes us apprehensive, Interactive Brokers remains well-positioned for growth in the current volatile operating environment, supported by its strong technological capabilities and diversified product offerings.
Heightened market volatility so far this year, increased client participation, efficient onboarding, global expansion and increased visibility via strategic moves like the stock split and S&P 500 inclusion are factors that have been driving IBKR’s customer accounts of late. The company’s record account growth and operational efficiency deliver a strong competitive edge.
Moreover, if we look at Interactive Brokers’ earnings estimate revisions, it is clear that analysts are bullish on the stock. Over the past 60 days, the Zacks Consensus Estimate for IBKR’s 2025 and 2026 earnings has moved upward. The estimates reflect year-over-year growth rates of 11.4% and 6.1% for 2025 and 2026, respectively.
Earnings Estimate Revision Trend
Image Source: Zacks Investment Research
Thus, for valuation-aware and more conservative investors, it is advisable to maintain caution and look for any signs of slowing growth before making any investment decision. But, for those focused on long-term potential, Interactive Brokers looks like an attractive investment option now. The company’s higher valuation reflects durable advantages and growth, not just investor enthusiasm.
At present, IBKR sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.