A Look At Interactive Brokers Group (IBKR) Valuation After Strong Profitability And Share Price Volatility

Interactive Brokers Group (IBKR) is back on investor radars after recent share price swings. The stock is now around US$71.54, with short term returns mixed over the day, week and month.

See our latest analysis for Interactive Brokers Group.

Those recent short term share price declines, including a 7.79% 1 month share price return and 6.41% year to date share price return, sit alongside a much stronger picture over longer periods, with a 1 year total shareholder return of 34.04% and very large multi year total shareholder returns that suggest sentiment around Interactive Brokers Group has improved over time.

If this volatility has you looking beyond a single brokerage stock, it could be a moment to scan other financial names using our screener of 22 top founder-led companies.

So with Interactive Brokers Group trading around US$71.54, a 12.76% gap to analyst targets and a value score of 0, is the market overlooking potential here or already pricing in future growth?

Most Popular Narrative: 374% Overvalued

According to the most followed narrative, Interactive Brokers Group's fair value sits at $15.08, a long way below the recent $71.54 close, which creates a sharp contrast between story and share price.

Earnings Show Exceptional Profitability Interactive Brokers (NASDAQ: IBKR) reported another standout quarter, reinforcing its position as one of the most operationally efficient brokerages in global finance. For Q3 2025, the company posted GAAP net revenues of $1.655 billion, up from $1.365 billion in the same quarter last year. Adjusted net revenues totaled $1.61 billion. GAAP diluted earnings per share rose to $0.59, compared to $0.42 a year earlier. Most strikingly, the firm delivered a pre-tax profit margin of approximately 79 percent, a level rarely matched in the industry, and more than double that of many legacy brokers. Growth Driven by Trading Activity and Interest Income Revenue growth this quarter was supported by strong trading volumes and interest income from client balances. Commission revenue increased by 23 percent to $537 million as equity trading volume jumped 67 percent and options trades rose 27 percent. Net interest income climbed 21 percent to $967 million due to higher securities lending, larger client margin loans, and rising interest on credit balances. While revenue expanded, expenses did not follow the same trajectory. General and administrative expenses declined by 59 percent year over year, mostly because of one-time regulatory and legal costs recorded in the prior-year period. This divergence between income and costs is what allowed Interactive Brokers to deliver its extraordinary margin performance.

Read the complete narrative.

Want to see what kind of long term revenue path and profitability profile needs to hold together for that $15.08 fair value? The narrative leans heavily on sustained earnings strength, sturdy margins and a future earnings multiple that assumes IBKR keeps its efficiency edge. Curious how those moving parts are stitched together into one number? The full narrative lays out the assumptions in black and white.

Result: Fair Value of $15.08 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the story could shift quickly if interest rates fall and squeeze net interest income, or if lower market volatility drags on trading volumes.

Find out about the key risks to this Interactive Brokers Group narrative.

Next Steps

If this mix of optimism and caution has you on the fence, it is worth moving quickly to look through the numbers yourself and weigh both sides, then see how the balance of 2 key rewards and 1 important warning sign lines up with your own view.

Looking for more investment ideas?

If you are weighing your next move, do not stop at a single brokerage stock. Broaden your watchlist with a few focused stock ideas tailored to different goals.

• Target potential mispricings by scanning companies our screener tags as 56 high quality undervalued stocks, and see which names line up with your own expectations.
• Build a steadier income stream by reviewing businesses in our list of 15 dividend fortresses, where yields and consistency sit at the center of the screen.
• Stay on the front foot by hunting for quality names in our screener containing 23 high quality undiscovered gems, before they sit on everyone else's radar.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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