Interactive Brokers (NasdaqGS:IBKR) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Interactive Brokers Group, Inc. (NasdaqGS:IBKR) is scheduled to report Q3 earnings results on October 20, 2020.

The company is expected to report earnings of $0.55/share on revenue of $512.5 million. The consensus earnings per share (EPS) of $0.55/share is based on a poll of 6 analysts and represents a growth in eps of 21.9% over the same quarter last year, when the company reported earnings of $0.45/share.

The revenue forecast of $512.5 million based on a poll of 3 analysts implies a year-over-year (YoY) growth in revenue of 10.0%. Last year the company reported $466 million in revenue for the quarter.

Expected to report EPS growth of 21.9% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $512.46 $466.00 10.0%
EPS $0.55 $0.45 21.9%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 7 tracked quarters, and missed expectations 3 quarters.

What are your expectations from Interactive Brokers Group, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.31 $0.57 81.1% Beat
Q1, 2020 $0.68 $0.69 2.1% Beat
Q4, 2019 $0.60 $0.58 −3.3% Missed
Q3, 2019 $0.52 $0.45 −12.8% Missed
Q2, 2019 $0.55 $0.43 −21.1% Missed
Q4, 2018 $0.61 $0.57 −6.3% Missed
Q3, 2018 $0.50 $0.51 1.5% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 21, 2020 $51.49 $51.56 0.1% Increase
April 21, 2020 $44.37 $39.39 −11.2% Decline
January 21, 2020 $50.15 $49.19 −1.9% Decline
October 15, 2019 $47.04 $46.10 −2.0% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.86, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.86 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Interactive Brokers Group, Inc. is currently trading at $49.95/share, down −1.0% for the day. The company is trading at approximately 85.8% of its 52-week high of $58.50/share. The company’s stock price is down −3.1% since the last earnings report and down −2.9% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 49.41 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:IBKR Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 24.75 and a forward P/E multiple of 21.76.

Interactive Brokers Group, Inc.’s current share price also implies a price-to-book (P/B) multiple of 13.57. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $49.95
P/E Ratio 24.7x
P/E Ratio (Fwd) 21.8x
PEG Ratio −4.4
Total Debt / Total Capital 18.3%
Levered Free Cash Flow $4.216 billion
Free Cash Flow Yield 20.2%

Finbox

Interactive Brokers Group, Inc. is a mid-cap stock with a market capitalization of $3.937 billion. The company operates in the Financials sector and the Capital Markets industry.

Interactive Brokers Group, Inc. operates as an automated electronic broker worldwide. It specializes in executing and clearing trades in securities, futures, foreign exchange instruments, bonds, and mutual funds. The company custodies and services accounts for hedge and mutual funds, registered investment advisors, proprietary trading groups, introducing brokers, and individual investors. In addition, it offers custody, prime brokerage, securities, and margin lending services. Further, the company provides electronic execution and clearing services. It serves institutional and individual customers through approximately 120 electronic exchanges and market centers. The company was founded in 1977 and is headquartered in Greenwich, Connecticut.

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