Is IBKR a buy, hold, or sell?
IBKR carries a valuation grade of Reduce. The trailing P/E of 36.7 sits 162% above the Financials sector median of 14.0x — a premium that demands sustained earnings delivery. Our discounted cash flow model produces an intrinsic range of $52–$88 — implying a -18% margin of safety at the current price of $85.42. The width of the DCF range reflects genuine uncertainty in the terminal growth rate assumption: the correct framework is a probability-weighted distribution over scenarios, not a single point estimate. See the DCF valuation framework for full methodology.
With a 12% beat rate on recent quarters, earnings predictability has been mixed. The most recent quarter delivered a 10.0% earnings surprise. Analyst estimate revisions are trending upward.
What are IBKR's key risk factors?
With a beta of 1.33, IBKR exhibits an above-market risk profile relative to the broad market. The 95th-percentile CVaR of -12.3% on a one-month horizon should inform position sizing directly: at a 10% portfolio weight, this tail event contributes approximately 1.2% of total portfolio loss in the worst 5% of months. Net margins of 16.1% fall below the Financials sector average of 28%, suggesting margin pressure. Return on equity of 23.6% suggests solid capital efficiency. Leverage is moderate with debt-to-equity at 152%.
Implied volatility of 3.0% is below realized volatility of 36.2%, potentially making options relatively cheap. Insiders have been net sellers to the tune of $21.0M recently. While routine dispositions are common, the magnitude bears watching. Short interest is low at 3.5% of float, suggesting limited bearish conviction.
How does IBKR fit in a diversified portfolio?
At typical HENRY portfolio weights — 10–20% of the equity allocation — IBKR carries a beta of 1.33, meaning it amplifies broad market moves proportionally. The appropriate weight is not a function of conviction alone, but of the full covariance structure across all holdings. See the Ledoit-Wolf covariance framework for the methodology behind these calculations.
Among closely correlated names, IBKR shows the strongest co-movement with HOOD (0.67), SOFI (0.52), GS (-0.05). Investors seeking diversification should note these correlation dynamics when constructing multi-asset portfolios.
True portfolio risk is a function of the full covariance structure across all holdings — not individual stock metrics. The Portfolio Health Check quantifies this at the portfolio level: it surfaces hidden concentration, marginal CVaR contributions, and the degree to which your overall allocation deviates from an optimal risk-adjusted mandate. The IBKR analysis here is a single node in that larger structure.
For the full prediction markets conviction thesis — covering IBKR’s position in the $51B→$1T distribution race, revenue model, regulatory risk framework (9th Circuit, S. 4469), and CFA-grade conviction rating — see: Prediction Markets 2026 — HOOD, COIN & IBKR Win the $1T Distribution Race →
