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Interactive Brokers Faces Growth Concerns: Time to Sell? (revised)

Zacks Equity Research

On Apr 5,  we have issued an updated research report on Interactive Brokers Group, Inc. IBKR. Dismal performance of the Market Making segment and intensifying competitive environment remain the company’s near-term concerns.

Notably, over the last 30 days, the Zacks Consensus Estimate for the stock fell nearly 1% to $1.47 for 2017. Also, for 2018, estimates fell 1.8% to $1.69 per share over the same time frame. Thus, the stock carries a Zacks Rank #4 (Sell).

Interactive Brokers’ shares lost 6.6% in the last six months, as against 24.3% gain of the Zacks categorized Investment Brokers industry.



On March 6, Interactive Brokers announced that it was discontinuing its options market making activities, which represent most of the results reported for its market making segment. The company has not announced any change to its dividend policy. 

Further, intensifying market rivalry and increasing volatility have been hampering the company’s profitability. With market volatility currently at historic lows, fewer trades overall have affected company revenues.

However, a low level of compensation expenses, development of proprietary software and increasing emerging market customers should continue contributing to Interactive Brokers’ growth.

Stocks Worth Mentioning

Other stocks in the same space include E*Trade ETFC, TDAmeritrade AMTD and Charles Schwab SCHW. Whereas Schwab currently has a Zacks Rank #3 (Hold), E*Trade and TDAmeritrade are currently Zacks Rank #4 (Sell) stocks.

You can see the complete list of today’s Zacks #1 Rank stocks here.

(We are reissuing this article to correct several mistakes. The original article, issued April 6, 2017, should no longer be relied upon.)


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E*TRADE Financial Corporation (ETFC): Free Stock Analysis Report
 
The Charles Schwab Corporation (SCHW): Free Stock Analysis Report
 
Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report
 
TD Ameritrade Holding Corporation (AMTD): Free Stock Analysis Report
 
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