Latest news with #InteractiveBrokersGroupIBKR
Yahoo
2 days ago
- Business
- Yahoo
IBKR Left Out of the S&P 500: Time to Buy the Dip or Wait it Out?
Shares of Interactive Brokers Group IBKR, a potential candidate for the S&P 500, sank 3.4% yesterday on non-inclusion in the benchmark index. On Friday, S&P Dow Jones Indices announced no changes to the S&P 500 during its quarterly such, investors turned bearish on IBKR and other potential candidates, including Robinhood Markets HOOD. Robinhood closed the session yesterday down 2%.Online brokers like IBKR, Robinhood and Charles Schwab SCHW have been benefiting from heightened market volatility and a rise in client activity on tariff concerns and rising geopolitical risks. The trend is expected to continue as markets and investors try to decipher the impact of tariffs on various sectors. Hence, over the past three months, shares of these brokerage firms – Interactive Brokers, Robinhood and Schwab – have been rallying. Further, these stocks have outperformed the industry in the same time frame. Three-month Price Performance Image Source: Zacks Investment Research As IBKR stock dipped yesterday, let's find out whether this is a buying opportunity. Global Exposure Through Product Diversification: IBKR has been taking several steps to enhance its presence globally. In May, the company extended trading hours for its Forecast Contracts to about 24 hours a day, which will boost its trading income. This move comes nearly a month after it launched Forecast Contracts in Canada, allowing investors to trade on the outcomes of several events impacting markets. In February, the company announced the expansion of its offering of Stocks and Shares Investment Savings Accounts with the addition of mutual funds in the U.K. This would allow investors to access a wide range of investment products in a tax-efficient savings vehicle, along with advanced trading platforms, low fees and global diversification. Last November, IBKR launched Plan d'Epargne en Actions accounts to boost its offerings to its French clients. Also, the launch of IBKR GlobalTrader has enabled investors worldwide to trade stocks through mobile company 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. IBKR Lite has enabled investors to trade commission-free. Further, it launched cryptocurrency trading via Paxos Trust Company, charging lower commissions compared to other crypto exchanges. The introduction of IBKR Desktop, the next-generation desktop trading application for Windows and Mac, marks a new chapter for company's technological superiority, combined with easier regulations to improve product velocity, will support its net revenues through higher client Excellence: Interactive Brokers' technological superiority remains one of its strongest aspects. The company processes trades in stocks, futures, options and forex on more than 150 exchanges across several countries and currencies. IBKR's compensation expense relative to net revenues (10.8% in the first quarter of 2025) remains below its industry peers due to its superior technology. Further, the company has been emphasizing developing proprietary software to automate broker-dealer functions, leading to a steady rise in revenues. Total net revenues witnessed a compound annual growth rate (CAGR) of 21.8% over the last five years (2019-2024). The momentum continued in the first three months of 2025. Net revenues are expected to improve further in the quarters ahead, given the solid DART numbers and robust trading backdrop driven by higher market participation. IBKR's Sales Estimates Image Source: Zacks Investment Research IBKR shares appear inexpensive relative to the industry. The company is currently trading at a 12-month trailing price-to-tangible book (P/TB) of 1.29X, well below the industry's 2.88X. Price-to-Tangible Book Ratio (TTM) Image Source: Zacks Investment Research Also, the stock is trading below its peers, Robinhood and Schwab. At present, Robinhood and Schwab's 12-month trailing P/TB TTM are 8.84X and 7.74X, a valuation perspective, Interactive Brokers shares present a compelling buying opportunity. The stock is still trading at a discount as the market has not yet fully recognized or priced the company's growth prospects. Over the past two months, the Zacks Consensus Estimate for 2025 and 2026 earnings has been revised 3.6% and 3.4% downward to $7.06 and $7.56, respectively. Estimate Revision Trend Image Source: Zacks Investment Research The projected figures imply a rise of 0.4% and 7.1% for 2025 and 2026, respectively. Interactive Brokers remains well-positioned for growth in the current volatile operating environment. Also, rapidly evolving trends will benefit the company's revenues and expand its market share. The company's strong technological capabilities and diversified product offerings enhance its global reach, supporting long-term growth. Also, undervalued shares are another Interactive Brokers has witnessed a persistent rise in non-interest expenses over the past few years. Expenses witnessed a CAGR of 13.8% over the five years ended 2024, with the trend persisting in the first quarter of 2025. Expenses are likely to remain elevated due to continued investment in franchises, product launches and technology upgrades. Further, rising geopolitical risks, foreign exchange fluctuations and tariff concerns are likely to affect global growth prospects, as reflected in the bearish analyst investors must watch for these headwinds and, for now, refrain from buying Interactive Brokers shares. Those who own the stock may consider selling it. At present, IBKR carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
16-04-2025
- Business
- Yahoo
IBKR Tanks on Q1 Earnings Miss, Announces Dividend Hike & Stock Split
Shares of Interactive Brokers Group IBKR plunged 9.9% in after-market hours on lower-than-expected quarterly results. Its first-quarter 2025 adjusted earnings per share of $1.88 lagged the Zacks Consensus Estimate of $1.92. However, the bottom line indicates a rise of 14.6% from the prior-year IBKR announced a forward stock split and an increase in quarterly were adversely impacted by higher expenses. On the other hand, an increase in revenues and growth in customer accounts and a rise in daily average revenue trades (DARTs) acted as considering non-recurring items, net income available to common shareholders (GAAP basis) was $213 million or $1.94 per share, up from $175 million or $1.61 in the prior-year quarter. Our estimate for net income was $204.7 Brokers reported comprehensive income available to common shareholders of $241 million or $2.19 per share compared with $149 million or $1.37 in the prior-year quarter. Total GAAP net revenues for the quarter were $1.43 billion, up 18.6% year over year. Adjusted net revenues were $1.4 billion, up 14.8%. The Zacks Consensus Estimate for the top line was $1.43 billion. Total non-interest expenses increased 10.4% year over year to $372 million. This rise was primarily due to execution, clearing and distribution fees costs, employee compensation and benefits charges, and general and administrative expenses. Our estimate for non-interest expenses was pegged at $409.5 before income taxes was $1.06 billion, up 21.8%.The adjusted pre-tax profit margin was 73%, up from 72% a year the reported quarter, total customer DARTs jumped 49.7% year over year to 3.52 million. Our estimate for the metric was 3.44 million. Customer accounts grew 31.7% from the year-ago quarter to 3,616,000. Our prediction for customer accounts was 3,836,000. As of March 31, 2025, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $72.1 billion compared with $68.1 billion as of Dec. 31, of March 31, 2025, total assets were $157.7 billion compared with $150.1 billion as of Dec. 31, 2024. Total equity was $17.5 billion, up from $16.6 billion as of Dec. 31, 2024. Interactive Brokers declared a quarterly cash dividend of 32 cents per share, representing a 28% jump from the prior payout. The dividend will be paid out on June 13 to shareholders of record as of May IBKR announced a four-for-one forward split of its common stock. Each record holder of common stock, as of market close on June 16, will receive three additional shares of common stock. This will be distributed after the close of market on June 17. The company expects the trading to commence on a split-adjusted basis at market open on June 18, 2025. Interactive Brokers' efforts to develop proprietary software and an increase in emerging market customers are expected to keep aiding financials. Relatively higher interest rates will likely aid revenue growth in the near term. However, rising expenses and high exposure to geopolitical risks through overseas are headwinds. Interactive Brokers Group, Inc. price-consensus-eps-surprise-chart | Interactive Brokers Group, Inc. Quote Currently, Interactive Brokers has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Here are some of the IBKR's peers that are yet to come out with quarterly numbers. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)Robinhood Markets HOOD is slated to announce first-quarter 2025 numbers on April the past week, the Zacks Consensus Estimate for Robinhood's quarterly earnings has moved 2.9% lower to 34 cents, implying an 88.9% jump from the prior-year reported Markets TW is also slated to announce quarterly numbers on April the past week, the Zacks Consensus Estimate for TW's quarterly earnings has remained unchanged at 85 cents, indicating a 19.7% rise from the prior-year reported number. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report Tradeweb Markets Inc. (TW) : Free Stock Analysis Report Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
