Shares of electronic investment broker Interactive Brokers (IBKR) gained in today’s trading as investors await its Q2 earnings results on July 16 after the market closes. Analysts are expecting earnings per share to come in at $1.74 on revenue of $1.266 billion. This equates to 31.8% and 19.4% year-over-year increases, respectively, according to TipRanks’ data.
This is ideal because earnings per share should grow faster than revenue as this demonstrates a high degree of operating and financial leverage in the business. However, it’s also worth noting that IBKR has beaten earnings estimates only four times during the past eight quarters. So, there’s still a chance that we may see EPS growth lag revenue growth.
Still, this seems unlikely to happen, given just how popular tech stocks like Nvidia (NVDA) have been recently. In fact, NVDA has frequently topped IBKR’s most actively traded lists, especially after the shares became more accessible through its 10-for-1 stock split. This undoubtedly generated a lot of commission revenue for IBKR.
More evidence of this can be seen by taking a quick look at IBKR’s website traffic. Indeed, the number of visitors jumped by 75.81% during the most recent quarter when compared to the same quarter of last year.
What Do Options Traders Anticipate?
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you. Indeed, it currently says that options traders are expecting a large 4.53% move in either direction.
Is IBKR a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on IBKR stock based on seven Buys, one Hold, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 50% rally in its share price over the past year, the average IBKR price target of $142.38 per share implies 14.21% upside potential.
