Interactive Brokers Group (IBKR) Valuation Check After Recent Share Price Pullback And Strong Profitability Narrative

Recent share performance and business scale

Interactive Brokers Group (IBKR) has seen mixed share performance recently, with a 1 day return of about 5% decline and a past week move of roughly 7% decline. This sets up questions about how its fundamentals line up with the current price.

Over the past month and past 3 months, returns of about 3% decline and 1% decline contrast with a 1 year total return of roughly 21%. Revenue of US$6.2b and net income of US$984.0m outline the current business scale.

See our latest analysis for Interactive Brokers Group.

With the share price at US$69.49, recent pressure, including a 1 day share price return of about a 5% decline and a 7 day share price return of roughly a 7% decline, contrasts with a much stronger multi year total shareholder return. This suggests momentum has cooled even though longer term holders have still seen substantial value creation.

If this pullback has you looking beyond a single broker stock, it could be a good moment to scan other financial names with strong ownership stories via our 22 top founder-led companies.

So with the shares cooling recently but longer term returns still strong, and analysts setting an average target above the current US$69.49 price, is this a fresh entry point, or is the market already pricing in future growth?

Most Popular Narrative: 360.8% Overvalued

Interactive Brokers Group's most followed narrative, according to yiannisz, places fair value at $15.08, far below the recent $69.49 close. This creates a wide gap between narrative pricing and the current market level.

Earnings Show Exceptional Profitability. Interactive Brokers (NASDAQ: IBKR) reported another standout quarter, reinforcing its position as one of the most operationally efficient brokerages in global finance. For Q3 2025, the company posted GAAP net revenues of $1.655 billion, up from $1.365 billion in the same quarter last year. Adjusted net revenues totaled $1.61 billion. GAAP diluted earnings per share rose to $0.59, compared to $0.42 a year earlier. Most strikingly, the firm delivered a pre-tax profit margin of approximately 79 percent, a level rarely matched in the industry and more than double that of many legacy brokers.

Growth Driven by Trading Activity and Interest Income. Revenue growth this quarter was supported by strong trading volumes and interest income from client balances. Commission revenue increased by 23 percent to $537 million as equity trading volume jumped 67 percent and options trades rose 27 percent. Net interest income climbed 21 percent to $967 million due to higher securities lending, larger client margin loans, and rising interest on credit balances. While revenue expanded, expenses did not follow the same trajectory. General and administrative expenses declined by 59 percent year over year, mostly because of one-time regulatory and legal costs recorded in the prior-year period. This divergence between income and costs is what allowed Interactive Brokers to deliver its extraordinary margin performance.

Read the complete narrative.

Curious how such strong profitability still feeds into a low fair value? The narrative leans on specific margin assumptions and future earnings power. The key point is how those inputs interact over time. If you want to see which expectations carry the most weight in that calculation, the full story lays it all out.

Result: Fair Value of $15.08 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, two things could easily challenge that 360.8% overvaluation call: shifts in interest rates that affect net interest income and further efficiency gains that support those high margins.

Find out about the key risks to this Interactive Brokers Group narrative.

Build Your Own Interactive Brokers Group Narrative

If you are not fully on board with that view or simply prefer to test the assumptions yourself, you can build a custom story for Interactive Brokers in just a few minutes with our Do it your way

A great starting point for your Interactive Brokers Group research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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