Interactive Brokers Group, Inc. (IBKR): A Bull Case Theory

We came across a bullish thesis on Interactive Brokers Group, Inc. on The Diversified Fins Analyst’s Substack by Collin Cook. In this article, we will summarize the bulls’ thesis on IBKR. Interactive Brokers Group, Inc.'s share was trading at $63.54 as of December 1st. IBKR’s trailing and forward P/E were 30.66 and 25.71 respectively according to Yahoo Finance.

Interactive Brokers (IBKR) reported a strong third quarter with record results across major financial metrics. Adjusted net revenue reached $1.61 billion, up 9% sequentially and 21% year-over-year, driven primarily by a 12% Q/Q increase in net interest income (NII) to a record $967 million and a 4% rise in commission revenue to $537 million. Total operating expenses declined 9% sequentially to $343 million, expanding pre-tax margins to an exceptional 78.7%.

Adjusted EPS rose 12% Q/Q and 30% Y/Y to $0.57, exceeding consensus estimates by roughly 5%, while revenue and expenses outperformed street expectations by 6% and 9%, respectively. Key operating metrics remained robust, with client accounts up 7% Q/Q and 32% Y/Y, and customer equity rising 14% sequentially to $758 billion. Average interest-earning assets increased 10% Q/Q, and total daily average revenue trades (DARTs) grew 2% sequentially and 34% year-over-year.

Management highlighted strength in securities lending due to increased IPO and M&A activity, though noted that a 1% drop in benchmark rates could reduce annual NII by roughly $417 million. Growth in newer products such as crypto trading, forecast contracts, and overnight trading was particularly strong, with volumes up 87%, 165%, and 90% year-over-year, respectively.

IBKR also maintained its 30% stake in Zero Hash and is advancing stablecoin funding and crypto staking capabilities. Despite regulatory headwinds in China, account growth remains resilient. Overall, the quarter underscored IBKR’s strong operating leverage, diversified revenue drivers, and continued client growth momentum.

Previously we covered a bullish thesis on Interactive Brokers Group, Inc. (IBKR) by Chit Chat Stocks in May 2025, which highlighted the company’s strong technology-driven culture, operational discipline, and long-term account growth potential. The company’s stock price has appreciated approximately by 21.21% since our coverage (adjusted for stock split of 4:1 in June 2025). This is because the thesis played out as IBKR continued to deliver record profitability and operating leverage. The thesis still stands as the company’s fundamentals remain intact. Collin Cook shares a similar but more near-term earnings-driven view, emphasizing IBKR’s record quarterly performance and product diversification.

Interactive Brokers Group, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 71 hedge fund portfolios held IBKR at the end of the second quarter which was 67 in the previous quarter. While we acknowledge the potential of IBKR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.