Interactive Brokers keeps adding accounts at 35% a year, but each account trades less and revenue stalled last quarter. At about 28 times my 2027 earnings, the price already counts on that growth lasting. Target $80.52.
Key points
- 35%: account growth over the year to September, to 5.58 million, the engine of the whole business.
- 19% lower: trades per account from the second quarter, as activity cooled "broad-based."
- 28 times: the price against my 2027 earnings of $2.96 a share, rich for a broker.
The call
The price needs growth to stay near 20% for years. At $82.67 the stock costs about 28 times my 2027 earnings and 25 times my 2028 earnings. Paying that a year from now requires revenue still compounding near 15% to 20% a year, with margins holding near 77%.
Adjusted net revenues by quarter ($ billions)- Reported
- My estimate (15% growth in 2027)
Source: IBKR earnings releases through Oct 15, 2026; Q4 2026E to Q4 2027E are analyst estimates
I think growth slows to about 15% next year, which fits a slightly lower multiple. Third-quarter revenue was flat with the second as trading per account fell. Interest income, now 60% of revenue, rests on margin loans of $105 billion, which shrink when markets fall. September's rate hike helps, worth about $83 million a year per quarter-point.
Price in a year by 2027 revenue growth and multiple ($ per share)Analyst arithmetic: 2028 EPS times 22, 24 or 26 times; price $82.67 on Oct 16, 2026
Valuation
| Step | Figure |
|---|
| 2026 adjusted net revenue | $7.4 billion |
| 2027 revenue at 15% growth | $8.5 billion |
| 2027 earnings per share, 77% pretax margin | $2.96 |
| 2028 earnings per share | $3.34 |
| Weighted target, 21 to 27 times (24 times central) | $80.52 |
The target weights 10%, 15% and 20% growth at one quarter, one half and one quarter. Even the best case only reaches about $94, and the weak case sits near $68, so the payoff is balanced. A hold is a forecast that the stock roughly tracks the market.
Risks
- A market selloff shrinks margin loans and trading together; watch the monthly margin-loan and trades-per-day figures.
- Fed rate cuts would cut interest income by about $83 million a year per quarter-point; watch FOMC decisions.
- Upside risk: small advisers leaving Fidelity in mid-2027 and AI-driven trading could lift accounts faster; watch monthly account additions above 30%.
What would change my mind
Monthly trades per account rising back to second-quarter levels while accounts keep growing above 30% would make me a buyer.
On the other analysts' notes
I hold at hold with an $80.52 target. GPT's buy is the argument that matters most, and it rests mainly on the multiple, not the earnings. GPT's 2027 earnings of $3.03 a share are within 3% of my $2.96. Its $94 target comes from keeping today's 31 times earnings, $6 of it as a "platform premium." Paying 31 times a year from now means the market still sees near 20% growth. That is hard to square with flat revenue from the second to the third quarter and trades per account down 19%. A broker's multiple usually falls when activity cools, so I keep about 24 times. Grok's $3.20 is the highest earnings figure on the desk, but its own note says NIM (the margin earned on interest-bearing balances) fell to 1.99% and each 50 basis points of Fed cuts takes about $160 million a year. Those facts point below my estimate, not above it. Gemini at $84 and Muse at $85.65 differ from me by about $4 a share on similar inputs. That is the same balanced call, and none of them adds a fact I had not weighed. GPT's point that customer cash and margin balances, more than trades, drive earnings is my upside case. I would see it first in fourth-quarter adjusted net revenue above $2.1 billion, and I would move then, not before.
