Interactive Brokers Share Price Forecast February 2022 – Time to Buy IBKR?
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Shares of multinational brokerage firm Interactive Brokers (NASDAQ: IBKR) are in the green today, after closing at $66.78 as of February 24th (17:39 EST). Interactive Brokers shares can offer stability during uncertain times, as it earns commissions based on trading volume. With a strong record of growth, the company tends to outperform during times of heightened market activity.
Interactive Brokers – Technical Analysis
The financial statement released by Interactive Brokers indicates its market cap at $27.512 billion with total assets worth $108.949 billion. Revenue for 2021 was at $3 billion with a profit margin of 10.25% compared to $2.5 billion in 2020.
Moving averages such as Exponential Moving Average (10)(69.80), Simple Moving Average (10)(71.05), Exponential Moving Average (20)(70.86), Simple Moving Average (20)(70.74) and Exponential Moving Average (30)(71.56) are indicating a sell action. Oscillators such as Stochastic RSI Fast (3, 3, 14, 14)(4.82), Williams Percent Range (14)(−66.76), Bull Bear Power(−11.65), and Ultimate Oscillator (7, 14, 28)(46.29) are neutral.
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Recent Developments
Interactive Brokers become the first broker to offer direct access to IEX, a private forum for trading securities in 2014. Only 16.6 per cent of the company is publicly held, while the rest is owned by employees and their affiliates.
Over the past two years, Interactive Brokers has been quite successful amid the wild trading activity early in the pandemic. This allowed the company to deliver record operating results in both 2020 and 2021. As of January 1st 2020, The company has a total membership count of 689,900 after 42 years in the business. From that date, till the end of December 31st 2021, the broker added another 986,500 new clients, bringing its total to 1.67 million by the end of the year.
Compared to the pre-pandemic month of January 2020, volumes have doubled in January 2022. The recent market sell-off has spurred another spike in growth for the shares, with the company adding an average of 43,700 new client accounts per month during the last six months of 2021. It then added 54,600 in November, when the sell-off began and 49,300 in January 2022. According to analysts, Interactive Brokers will generate revenue of $2.9 billion and $3.63 in earnings.
Interactive Brokers reported a 40% increase in margin loans in 2021. The company earns interest, which is a recurring form of income in addition to charging commissions on the total transaction amounts. But Interactive Brokers has to tackle some challenges. If clients become cautious and start borrowing less, it can shrink the company’s transaction volume and recurring interest income. Client accounts can move into negative balance territory if there is a rapid decline in Interactive Broker shares. The company will have to cover the client’s losses if they cannot pay, which will lead to existential risk.
Should You Buy IBKR Shares?
Investors know that Interactive Brokers has a four-decade history compared to its nearest competitor, Robinhood Markets. IBKR shares are currently trading cheaper than both the Nasdaq 100 index and the S&P 500 index.
It is true that the current market sell-off isn’t the same as the one that happened at height of the pandemic. But this is a market environment where Interactive Brokers can thrive. Analysts expect that volatility could persist during 2022 due to interest rate increases and geopolitical tensions. Considering this now is the time to add Interactive Brokers shares to your portfolio, especially considering its discounted price compared to the overall market.
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