Interactive Brokers (IBKR) Gains a New Bull As Stock Makes Fresh High – Here’s Why

Interactive Brokers stock (IBKR) has hit fresh highs at $71.63 leading into the final trading session of the week, with the street growing increasingly bullish on the name.

The recent initiation of coverage by BMO Capital, with an ‘Outperform' rating and a price target of $82, signals a strong vote of confidence in the brokerage firm's growth prospects. BMO Capital's analysis suggests that Interactive Brokers' robust growth alleviates valuation concerns, and that the company is less reliant on retail investor sentiment than many believe.

The firm also highlights Interactive Brokers' success in filling gaps left by larger brokers, particularly in providing prime brokerage services to smaller hedge funds, as well as its emerging presence in the cryptocurrency space. These factors appear to be driving positive sentiment around the stock.

Adding to the bullish outlook, Interactive Brokers' inclusion in the S&P 500 index in late August is expected to further bolster demand for the stock. This inclusion typically prompts index funds and other passive investment vehicles to increase their holdings of IBKR, thus creating a more stable base of investors. The announcement of the S&P 500 inclusion triggered a 3.4% increase in pre-market trading, underscoring the market's positive reaction.

Interactive Brokers' exploration of launching its own stablecoin also presents a potential growth avenue. This initiative, revealed in July, aims to facilitate 24/7 funding of brokerage accounts and streamline cryptocurrency asset transfers. While the company is taking a cautious approach to the crypto space, the move signals its intent to capitalize on the growing adoption of digital assets. The firm already offers crypto trading through partnerships and investments in platforms like Paxos and Zero Hash.

Furthermore, the company's expansion of 24-hour trading capabilities caters to the growing global demand, particularly in regions such as the Middle East and Far East. Chairman Thomas Peterffy has noted the increasing importance of round-the-clock trading, with approximately 2.2% of Interactive Brokers' trading volume occurring during overnight hours as of May 2025. The company anticipates this figure will increase significantly over the next two decades.

Despite these positive developments, Interactive Brokers has faced regulatory challenges. In July, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced an $11.8 million settlement with the company for apparent violations of several sanctions programs. These violations, which occurred between 2016 and 2021, involved providing brokerage services to individuals in sanctioned regions. This regulatory setback serves as a reminder of the compliance complexities inherent in the financial services industry.

In 2024, Interactive Brokers reported revenues of $5.20 billion, marking a 17.65% increase from the previous year, and earnings rose by 25.83% to $755 million. While the average analyst rating remains a ‘Strong Buy,' the 12-month price target of $57.72 is slightly below the current price, suggesting that some analysts may have already factored in much of the company's recent growth.