Palantir a high-risk investment with ’a one-of-a-kind growth and margin model’
On Wednesday, Citi analysts increased the price target for Interactive Brokers Group (NASDAQ:IBKR) shares to $225 from the previous $220, while maintaining a Buy rating on the stock. The adjustment follows the company's release of its fourth-quarter earnings, which surpassed expectations. According to InvestingPro data, eight analysts have recently revised their earnings estimates upward, with price targets ranging from $140 to $291.
Interactive Brokers reported an adjusted earnings per share (EPS) of $2.03 for the fourth quarter of 2024, exceeding both the Citi estimate and the consensus of $1.81 and $1.84, respectively. Notably, the core EPS stood at $1.96, excluding one-time items such as a $24 million net gain in other income and a $5 million compensation adjustment. The company, now valued at over $81 billion in market capitalization, has demonstrated strong momentum with a remarkable 113% return over the past year.
The firm's commission revenues came in slightly above forecasts at $477 million, against Citi's prediction of $472 million. More impressively, the net interest income (NII) for the quarter was reported at $807 million, significantly higher than the estimated $782 million. Interactive Brokers also managed to keep expenses under control, reporting them at $347 million, which was under the $361 million Citi had estimated.
Citi analysts highlighted that Interactive Brokers' strong quarterly performance was driven by robust account and margin balance growth, coupled with vigorous client engagement. Looking forward, Citi anticipates the continuation of these trends and maintains a positive outlook on the company's fundamental growth prospects.
The analysts underscored Interactive Brokers' competitive advantages and growth opportunities as key reasons for their constructive stance on the stock's long-term narrative. The company's latest financial results appear to reinforce Citi's confidence in its recommendation to investors.
InvestingPro analysis shows the company maintains a "GREAT" financial health score, with robust revenue growth of 16.7% and consistent dividend payments for 16 consecutive years. Discover more insights and detailed analysis in the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
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