4 Reasons to Invest in Interactive Brokers (IBKR) Stock Now
It seems to be a wise idea to invest in Interactive Brokers IBKR stock right now. The company’s continuous efforts to develop proprietary software will likely aid financials. Moreover, an increase in emerging market customers is expected to aid the top line.
Over the past 30 days, the Zacks Consensus Estimate for the company’s current-year earnings has been unchanged. IBKR currently carries a Zacks Rank #2 (Buy).
Looking at its price performance, IBKR shares have gained 19% over the past six months compared with 13.1% growth recorded by the industry.
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We have mentioned a few factors below that make the IBKR stock a promising pick.
Earnings Growth: Interactive Brokers has witnessed earnings growth of 24.2% in the past three to five years, higher than the industry average of 6.8%. The uptrend is likely to continue in the near term. In 2024, the company’s earnings are projected to grow 5.6%.
Revenue Strength: Driven by an increase in interest income, commissions and the company’s business restructuring efforts, its net revenues witnessed a compound annual growth rate (CAGR) of 17.9% over the last five years (2018-2023).
Given the steady improvement in Daily Average Revenue Trades, IBKR is expected to continue to witness a rise in the top line. For 2024 and 2025, the company’s revenues are projected to grow 4.9% and 0.1%, respectively. We anticipate total net revenues (GAAP) to increase 4.5% in 2024, remain stable year over year in 2025 and increase 1.8% in 2026.
Strong Leverage: Interactive Brokers does not use debt to finance its operations. It has a debt/equity ratio of nil compared with the industry average of 0.14. This highlights that IBKR is better positioned than its peers. The company will be more financially stable in adverse economic conditions.
Technological Advancement: Interactive Brokers processes trades in stocks, futures, options and forex on more than 150 exchanges across several countries and currencies. Unlike many of its peers, IBKR has a very low level of compensation expenses relative to net revenues, primarily driven by its technological excellence.
The company has been undertaking several measures to enhance its presence. The launch of IBKR GlobalTrader will enable investors around the world to trade stocks through a mobile application.
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. The launch of IBKR Lite has enabled investors to trade commission-free and is, thus, expected to improve the company’s market share. 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.
Further, the introduction of IBKR Desktop, the next-generation desktop trading application for Windows and Mac, marks a new chapter for innovation. IBKR Desktop will help today’s generation’s traders who demand simplicity but value Interactive Brokers’ powerful trading tools.
Other Stocks Worth Considering
A couple of other top-ranked stocks from the same space are Piper Sandler Companies PIPR and Nomura Holdings, Inc. NMR. Currently, PIPR sports a Zacks Rank #1 (Strong Buy) and NMR carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, the Zacks Consensus Estimate for NMR’s current fiscal-year earnings has been revised 43.5% upward. The stock has gained 44.9% over the past six months.
Earnings estimates for PIPR have been revised 9.1% upward for the current year over the past 60 days. Over the past six months, PIPR shares have rallied 26.9%.
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Nomura Holdings Inc ADR (NMR) : Free Stock Analysis Report
Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
Piper Sandler Companies (PIPR) : Free Stock Analysis Report
