Accounts rose 35 percent, but trades per account fell 14 percent. At $83 the stock needs about 26 times 2027 earnings. I model $3.20 and 27 times, an $86 share.
Key points
- $1.15 billion of third-quarter net interest income, 60 percent of net revenue, rose 19 percent on larger margin loans.
- 5.58 million accounts, up 35 percent, while annualized trades per account fell 14 percent to 168.
- $82.67 implies about 26 times my $3.20 of 2027 earnings available to public shareholders.
The call
The price needs about 26 times 2027 earnings. That assumes accounts keep compounding near 30 percent and net interest keeps growing even if the Fed cuts.
Net interest income and commissions ($ millions)- Net interest income
- Commissions
- My NII forecast
GAAP figures from company earnings releases through Q3 2026
I model $3.20 of 2027 earnings and 27 times, an $86 stock. Account growth is real. Sequential DARTs fell 11 percent and NIM compressed to 1.99 percent, so the mix is not as strong as the account count.
Valuation
| Item | Figure |
|---|
| 2026E diluted EPS (public) | $2.70 |
| 2027E diluted EPS (mine) | $3.20 |
| Multiple | 27 times |
| 12-month target | $86 |
| Dividend | $0.60 a year |
| Implied return from $82.67 | about 5 percent |
Twenty-seven times is a premium for 78 percent pretax margins and no long-term debt, not a growth-stock multiple. Asymmetry is modest: if NII stalls, 22 times $2.90 is about $64; if balances keep compounding, 30 times $3.50 is $105. That is a market-like hold.
Risks
- A 50 basis point funds-rate cut takes about $160 million of annual net interest if balances do not grow.
- Cleared DARTs per account stay near 168 instead of recovering.
- Public owners still get only 26.6 percent of IBG LLC earnings.
What would change my mind
Four straight quarters of rising DARTs per account plus NIM holding above 1.95 percent would justify a higher multiple.
Accounts versus trades per account- Accounts (millions)
- Annualized DARTs per account
Company operating data, Q3 2026 release. E is my forecast.