Summary
A strong earnings report from Interactive Brokers is expected to be released on Thursday, July 17, which may further boost the stock's performance. With a nearly +100% increase in the last year and a +35% year-to-date growth, Interactive Brokers looks poised for higher highs after reaching its 52-week peak of $60 per share.
Favorable Quarterly Reports from Large Domestic Banks
The financial sector is drawing attention due to favorable quarterly reports from most large domestic banks. Among these, Interactive Brokers stands out as a company worthy of consideration ahead of its Q2 results on Thursday, July 17. Soaring nearly +100% in the last year, Interactive Brokers' stock has reached a +35% year-to-date growth and is looking poised for higher highs after hitting a 52-week peak of $60 per share in today's trading session.
The automated global electronic broker is seeing supercharged trading volumes following an unprecedented rebound among the U.S. stock exchanges. Enhancing its product offerings, Interactive Brokers has recently launched IBKR InvestMentor, a microlearning app aimed at educating new investors and has expanded its ETF and cryptocurrency offerings to compete with competitors such as Charles Schwab SCHW and Robinhood Markets HOOD.
Interactive Brokers Q2 Expectations
Based on Zacks' estimates, Interactive Brokers' Q2 sales are expected to increase 8% to $1.34 billion compared to $1.23 billion a year ago. On the bottom line, Q2 EPS projections of $0.45 would be a slight increase from $0.44 a share in the prior year quarter.
Furthermore, the Zacks ESP (Expected Surprise Prediction) indicates Interactive Brokers could surpass earnings expectations with the Most Accurate and recent estimates among Wall Street having Q2 EPS slated at $0.46 (Current Qtr below). Zacks Investment Research Image Source: Zacks Investment Research
Positive EPS Revisions & Steady Growth
Most intriguing and alluding to the plausibility of more upside in IBKR is that earnings estimate revisions for Interactive Brokers have continued to trend higher following the announcement of its upgraded product offerings and investment tools. In the last week, fiscal 2025 and FY26 EPS estimates are up 4% and 3%, respectively.
Zacks Investment Research Image Source: Zacks Investment Research
Interactive Brokers' annual earnings are now expected to rise 4% this year and are projected to increase another 7% in FY26 to $1.97 per share. Reassuringly, this is accompanied by projections of steady sales growth with Interactive Brokers' top line expected to expand 3% in FY25 and forecasted to stretch another 6% next year to $5.73 billion.
Zacks Investment Research Image Source: Zacks Investment Research
IBKR Valuation Comparison
While the excitement for Interactive Brokers and Robinhood's innovative trading platforms has led to blazing performances for both of their stocks, it's noteworthy that IBKR still trades at a reasonable 32.4X forward earnings multiple compared to HOOD at 79.6X.
In comparison, Interactive Brokers trades closer to their Zacks Financial-Investment Bank Industry average of 15.8X and Charles Schwab's 21.9X.
Bottom Line
Investors looking for exposure to the growth that many FinTech firms offer have a more affordable option with Interactive Brokers as opposed to Robinhood Markets. Appearing to be poised for higher highs ahead of its Q2 report, IBKR currently sports a Zacks Rank #1 (Strong Buy) and notably has an "A" Zacks Style Scores grade for Momentum.
Conclusion
Interactive Brokers' strong earnings expectations, coupled with its competitive valuation and innovative product offerings, make it an attractive investment opportunity. As the company continues to grow and expand its services, investors may find Interactive Brokers a wise choice for their portfolios.