Is Interactive Brokers (IBKR) a Buy, Hold or Sell?

Interactive Brokers — our independent, AI-built valuation and rating, in brief.

SELL (reduce)

12-mo fair value

$68.00

To fair value

−24%

By José Luis Pascual, CFA · report dated 2026-08-02 · fair value derived independently of the market price.

The thesis, in brief

IBKR's 4.2x three-year return is ~60% multiple re-rating (14.6x to 35x trailing) rather than earnings, and with 32x 2026E EPS capitalising peak-cycle inputs while $10.3bn of idle excess capital compounds at ~3.6% and drags fully-taxed ROTCE to ~20%, an excess-return valuation at a 10.0–10.5% cost of equity supports only ~$68 — we are wrong if 2027 EPS exceeds $3.50 with pre-tax margin held at or above 76% and excess capital falling below $8bn

How we value it

We value Interactive Brokers using Excess-return/residual-income on fully-exchanged tangible book at 10.0–10.5% cost of equity (terminal g 4.5%), cross-checked against justified forward P/E on 2027E. The 12-month fair value is set from that intrinsic estimate first, then compared to the market to read the upside or downside — never anchored to the current price.

What the full report covers

Business & moat + industry cycle
Earnings quality & normalization
ROTCE vs cost of equity
Balance-sheet safety & capital (CET1)
P/TBV + excess-return / residual-income
Bear / base / bull fair values
Earnings-call analysis
Insider activity & positioning
Technicals (RSI / ADX)
A falsifiable thesis

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