Interactive Brokers Beats Q4 Expectations

Interactive Brokers (NASDAQ: IBKR) reported stronger-than-expected Q4 results, topping both earnings and revenue estimates.

Despite the beat, shares of the U.S.-based automated electronic broker dropped 1.3% during the extended trading session on January 18.

Q4 Numbers

Adjusted earnings of $0.83 per share gained 20.3% year-over-year, exceeding analysts’ expectations of $0.80 per share. The company reported earnings of $0.69 per share for the prior-year period.

Furthermore, revenues jumped 17.3% year-over-year to $683 million and exceeded consensus estimates of $671.63 million. The increase in revenues reflects an 11% surge in Commission revenue to $32 million, driven by higher customer options and futures trading volumes, and higher average per-share commissions.

Furthermore, net interest income increased 31% year-over-year due to higher-margin loan balances and strong securities lending activity. Notably, the pretax profit margin grew 200 bps to 66% during the quarter.

Wall Street’s Take

Following the Q4 results, Jefferies analyst Daniel Fannon reiterated a Buy rating on the stock with a price target of $92 (27.9% upside potential).

The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 3 Buys and 1 Hold. At the time of writing, the average Interactive Brokers stock price projection was $101, which implies 38.34% upside potential to current levels.

TipRanks’ Smart Score

IBKR scores an 9 on 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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