On Sep 22, 2016, we have issued an updated research report on Interactive Brokers Group, Inc. IBKR. A low level of compensation expense and geographically diversified revenue continue contributing to growth. However, dismal performance of the Market Making segment remains a near-term concern.
Interactive Brokers’ position with respect to the interface of four broad historical trends is impressive. Also, owing to its technological excellence, the company incurs a lower level of compensation expense relative to net revenue.
Moreover, Interactive Brokers has been consistently exploring growth opportunities in the emerging markets of Taiwan, Mexico and India. More than 60% of its new customers are from outside the U.S., leading to a greater diversification of revenues.
On the flip side, we remain concerned about the dismal performance of the Market Making segment as Interactive Brokers pays quarterly dividend from this segment. Notably, the segment performance has been disappointing over the past few quarters.
Further, intensifying market rivalry and increasing volatility have been hampering this investment broker’s profitability.
Over the last seven days, the Zacks Consensus Estimate declined 1.2% to $1.62 per share for 2016. Nonetheless, for 2017, it remained stable at $1.63 per share over the same time frame.
Currently, Interactive Brokers carries a Zacks Rank #3 (Hold).
Stocks Worth Considering
Investment brokers that are worth a look include LPL Financial Holdings Inc. LPLA, Yintech Investment Holdings Limited YIN and Raymond James Financial, Inc. RJF.
LPL Financial, currently sporting Zacks Rank #1 (Strong Buy), has been witnessing upward estimate revisions over the last 60 days. Over the last three months, the company’s share price surged nearly 18%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Currently carrying a Zacks Rank #1, Yintech Investment has been witnessing upward estimate revisions over the last 30 days. Further, the stock has jumped more than 46% over the last three months.
Raymond James, with a Zacks Rank #2 (Buy), has been witnessing upward estimate revisions over the last 60 days. Also, the company’s shares have increased nearly 9% over the past three months.
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