IBKR Interactive Brokers
Best-in-class low-cost brokerage moat and founder discipline, but priced well ahead of normalized earnings power.
The business
IBKR operates a highly automated electronic brokerage platform serving individual and institutional traders across 150+ markets. It earns commissions on trades, net interest income on margin loans and customer cash balances, and market-data/other fees, all delivered through proprietary low-cost technology with minimal human intervention.
Quality gate · 82/100
Moat & management
| Moat | wide moat |
| Source | cost advantage |
| Trajectory | widening |
| Management | excellent |
Decades of investment in a single automated technology stack let IBKR run at ~88% operating margins while undercutting full-service and even many discount brokers on fees; this cost gap compounds as scale grows and competitors with legacy/manual infrastructure or bank-cost-structures cannot easily replicate it. Global account growth and expanding product breadth (options, futures, crypto, international access) reinforce switching costs and liquidity/network effects over time.
Founder-led by Thomas Peterffy with a multi-decade record of reinvesting in the technology platform, keeping costs low, and passing savings to customers to compound account growth rather than maximizing near-term take rate; capital allocation has been disciplined with minimal dilution (2.7% share CAGR) relative to growth achieved.
Owner-earnings inputs
| Owner earnings (TTM) | 1.04B |
| Owner-earnings yield | 0.6% |
| Free-cash-flow yield | 10.5% |
| Growth used (normalized) | 10.0% |
| Terminal growth | 3.0% |
| Discount rate (hurdle) | 10.6% |
Key risks
- Net interest income is heavily levered to the rate cycle; a return to near-zero rates would compress current earnings materially
- Trading/commission revenue and margin balances are cyclical and sensitive to market volatility and risk appetite
- Regulatory or competitive fee compression (zero-commission pressure, payment-for-order-flow scrutiny) could erode take rates
- Key-person concentration risk given Peterffy's continued central role and large economic interest in the operating LLC structure
- Reported net income reflects only IBKR Group's minority economic interest in the operating LLC, making headline owner-earnings figures easy to misread
Catalysts
- Continued double-digit growth in funded accounts, especially international and younger demographics
- Expansion into new products (crypto, prediction markets, additional global market access) widening the platform's utility
- Operating leverage as fixed technology costs are spread over a still-growing account and asset base
Recent news
score · 8 articles
- Dow Jones Futures: S&P 500 Regains 50-Day As Sandisk, Micron Soar; Google, Tesla Earnings Due
- Interactive Brokers Group Inc (IBKR) Q2 2026 Earnings Call Highlights: Record Revenues and ...
- Interactive Brokers (IBKR) Q2 2026 Earnings Call Transcript
- Interactive Brokers Group Q2 Earnings Call Highlights
- Interactive Brokers Group, Inc. (IBKR) Beats Q2 Earnings and Revenue Estimates
- Interactive Brokers Earnings Surge Amid Trading Boom, Matching Charles Schwab
- Interactive Brokers Earnings Reveal $1.90B Revenue, How Will IBKR Stock React?
- Update: Potential Middle East Ceasefire Lifts US Equity Futures Pre-Bell
⚠ financial — owner earnings ≈ net income · financial — valued by residual income (ROE vs cost of equity on book equity) · Extreme gap to market price — large, well-covered names are rarely mispriced this much; likely embeds risk the model underweights. A flag, not a verdict. · Rich vs our conservative value, but a quality business is not a short — stance is WAIT for a better price, not sell.