On Friday, Interactive Brokers Group (IBKR) experienced a significant increase of 7.65%, following its impressive performance in exceeding expectations for both revenue and profit reported on Thursday night.
As we approach the quarter’s end, analysts predicted Interactive Brokers would make approximately $0.45 in earnings per share, after considering one-time expenses, with revenue of nearly $1.4 billion. However, the company actually reported earnings per share of $0.51 according to standard accounting practices and recorded sales close to $1.5 billion.
Interactive Brokers Q2 earnings
Apart from surpassing the expected “modified” earnings figure by Wall Street, Interactive Brokers also saw a significant 24% increase in earnings compared to Q2 of the previous year. Interestingly, while the revenue growth for the quarter was 20%, this rise in earnings indicates an improvement in profit margins on revenue as well.
As a fervent observer, I found it intriguing that new customer accounts expanded by just 32% during the last quarter. Yet, the remarkable surge in our company’s revenue and profits seems to be primarily driven by our loyal clientele, with fresh customers merely testing the waters initially. In fact, our Daily Average Revenue Trades (DARTs) surged a whopping 49%, indicating that our long-standing customers actively traded more frequently during this period. This trend suggests not only their dedication to our company but also the potential for further growth as these initial testers deepen their engagement with us.
Is Interactive Brokers stock a buy?
Management hasn’t provided any guidance regarding the upcoming quarter or the entire year. However, stock analysts who closely watch this company predict that Q3 earnings will be nearly identical to Q2, around $0.46 per share, unless there are unexpected interventions by the company. Similarly, they anticipate revenue growth to be relatively low, at approximately 3% compared to last year.
Over the long run, analysts foresee the company increasing its annual earnings by about 12.5%. However, this growth rate seems rather slow considering the stock’s high valuation, which is almost 33 times its trailing earnings.
Given that cost, it’s tough for me to suggest purchasing this stock, regardless if they surpassed or didn’t meet their earnings expectations.
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2025-07-19 12:17