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Interactive Brokers Group IBKR is scheduled to announce third-quarter 2025 results on Thursday, Oct. 16, after market close.
The company’s second-quarter 2025 earnings surpassed the Zacks Consensus Estimate. Results were primarily aided by an increase in revenues, growth in customer accounts and a rise in Daily Average Revenue Trades (DARTs). However, higher expenses were the undermining factor.
In the to-be-reported quarter, IBKR is expected to have witnessed decent top and bottom-line growth. This can be attributed to continued substantial market volatility and heightened client activity. The Zacks Consensus Estimate for third-quarter revenues of $1.41 billion suggests 2.9% year-over-year growth.
In the past week, the consensus estimate for earnings for the to-be-reported quarter has been unchanged at 49 cents per share. This estimated figure indicates an 11.4% rise from the prior-year quarter.
Interactive Brokers has a decent earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters, with the average beat being 4.06%.
Client activity was solid in the third quarter, with the major indexes experiencing extreme volatility due to the trade policies and a change in the Federal Reserve’s monetary policy stance. This, along with robust DART numbers in all three months of the quarter, is expected to have supported Interactive Brokers’ commission revenues.
The Zacks Consensus Estimate for commission revenues is pegged at $490 million, indicating a 12.6% jump from the prior-year quarter. Our estimate for the metric is $472.5 million.
The consensus estimate for other fees and services of $72 million implies no growth from the prior-year quarter. We expect the metric to be $74.9 million.
The Fed lowered interest rates by 25 basis points to 4.00-4.25% in mid-September. This is less likely to have hurt IBKR’s net interest income (NII) in the to-be-reported quarter to a great extent, as rates remained relatively high for a significant part of the quarter. The consensus estimate for NII is $797 million, implying a marginal decrease from the prior-year quarter’s actual. We project NII to be $760.9 million.
On the cost front, total operating expenses are likely to have been elevated as IBKR invests in key areas to enhance platform capabilities, drive product innovation, improve customer support and build upon regulatory and compliance functions. We anticipate total non-interest expenses of $361.3 million.
Per our quantitative model, it cannot be conclusively predicted whether Interactive Brokers will be able to beat earnings estimates this time. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Interactive Brokers has an Earnings ESP of 0.00%.
Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the third quarter, Interactive Brokers' price performance was solid. The stock outperformed the industry and its close peers — Schwab SCHW and Tradeweb TW.
IBKR shares appear expensive relative to the industry. The company is currently trading at a 12-month forward price-to-sales (P/S) of 20.00X, well above the industry’s 4.31X.
Also, the stock is trading above its peers, Tradeweb and Schwab. At present, Tradeweb and Schwab’s 12-month forward P/S are 11.51X and 6.76X, respectively.
From a valuation perspective, Interactive Brokers shares do not present a buying opportunity because they are overvalued currently compared with the industry at large.
IBKR has continuously been making efforts to expand the product suite and reach of its services. In August 2025, it introduced Connections, a new feature designed to help investors discover trading opportunities and evaluate investments by highlighting related ideas across global markets. Also, it launched zero-commission U.S. stock trading in Singapore. In July, IBKR launched NISA accounts to help Japanese investors build wealth tax-free. In May, it extended the trading hours for Forecast Contracts to nearly 24 hours a day and in April, it launched the prediction markets hub in Canada.
Last year, IBKR introduced Plan d’Epargne en Actions accounts to boost its offerings for its French clients. The launch of IBKR GlobalTrader has enabled investors worldwide to trade stocks through mobile applications. Moreover, 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.
Continued product diversification efforts will help the company expand market share and global footprint, supporting top-line growth.
Also, Interactive Brokers’ technological superiority is one of its strongest aspects. The company processes trades in stocks, digital assets, futures, options and forex on more than 160 exchanges across several countries and currencies. Unlike many of its peers, IBKR has a very low level of compensation expenses relative to net revenues (10.9% in the first half of 2025). This helps the company generate solid growth.
Interactive Brokers has been emphasizing developing proprietary software to automate broker-dealer functions, leading to a steady rise in revenues. Over the last five years (2019-2024), total net revenues witnessed a compound annual growth rate (CAGR) of 21.8%, with the upward momentum continuing in the first half of 2025. The company’s technological superiority, combined with easier regulations to improve product velocity, will likely help its net revenues through higher client acquisitions.
Interactive Brokers remains well-positioned for growth in the current volatile operating environment, supported by its strong technological capabilities and diversified product offerings. Heightened market volatility, increased client participation, efficient onboarding and global expansion will likely keep driving the company’s customer accounts.
However, a premium valuation compared with the industry makes us apprehensive. Thus, for valuation-aware and more conservative investors, it is advisable to maintain caution and look for any signs of slowing growth before making any investment decision. Those who already own the IBKR stock in their portfolios should hold on to it now since the company is not expected to disappoint in the long run.
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This article originally published on Zacks Investment Research (zacks.com).
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