Shares of Interactive Brokers (IBKR 1.98%) popped 16.4% last month, according to data from S&P Global Market Intelligence. The disruptive investment brokerage for sophisticated global traders continues to gain market share and report record profit margins, leading investors to bid up shares to new highs last month.
Here's why Interactive Brokers' stock was soaring in January, and whether it is a buy right now.
NASDAQ: IBKR
Key Data Points
Adding new clients
Interactive Brokers pitches itself as a low-cost option for investors of all sizes to access global markets. Unlike a traditional brokerage that offers trading only in home-country stocks and limited international access, Interactive Brokers makes it easy for clients to buy stocks worldwide. You can live in a smaller country like Colombia and trade assets listed anywhere, or close to it.
Replicate this across the majority of countries worldwide, and it is no surprise that Interactive Brokers keeps gaining share of the stock, options, and crypto trading markets. By the end of 2025, customer accounts had grown to 4.4 million, up 32% year-over-year in December. This is much faster than the entire universe of people trading, and shows that Interactive Brokers is gaining share in the industry.
Commission revenue grew 22% year-over-year last quarter, while net interest income was up 20%. Most impressive was the company's pre-tax profit margin of 79%, one of the highest in the world. Interactive Brokers has spent decades building automated trading systems that enable it to operate at scale with a much smaller employee count than the competition. This is why the business is so profitable.
Image source: Getty Images.
Time to buy Interactive Brokers stock?
Up over 900% in the past 10 years, Interactive Brokers has been a great stock to own since it began gaining global user momentum. Today, after rising in January and hitting another all-time high, shares trade at a price-to-earnings ratio (P/E) of 33.2.
This is an expensive-looking P/E ratio, but it is a valuation that Interactive Brokers should be able to grow into if it can keep growing customers at a 32% annual rate. There are hundreds of millions of stock traders -- small and large -- around the world that Interactive Brokers can try and target to switch to its global trading platform.
As its customer count grows, so will commission revenue and net interest income, driving consolidated earnings higher over the rest of the decade. Interactive Brokers' stock may look expensive today, but it will still be a great stock to buy and hold for the next 10 years.
