IBKR - Interactive Brokers: A Well Disguised Growing Profitable Gem

2024-04-26 06:16:12 ET

Summary

• Interactive Brokers is a discount brokerage company with a strong profitability profile and a wide selection of products.
• The company's unique ownership structure clouds the picture somewhat, but under the complication, IBKR's strong profitability and growth profile more than justify its valuation.
• Despite potential risks such as NIM cyclicality, we see IBKR as an attractive investment opportunity with the potential for growth to $160 per share in the coming years.
• We rate IBKR a 'Buy'.

If you take a cursory glance at Interactive Brokers ( IBKR ) as a company, it can be a little difficult to tell what's going on from a high level.

Due to an accounting quirk that has to do with the large chunk of shares that are insider-held, by some measurements, the company either looks incredibly expensive, or incredibly cheap. Is the Market Cap $12 billion, or $48 billion? Do diluted EPS figures mean anything? Finding out the true state of the firm can take some digging....

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