Interactive Brokers Stock: A Five-Year Growth Outlook

Key Points

• Interactive Brokers’ client accounts climbed 35% year over year as of August, over twice the pace a five-year double would require.

• Net interest income is the firm’s biggest revenue line, and its growth picked up even as the Federal Reserve cut rates.

• The stock trades at roughly 29 times next year’s expected earnings, more than double the price-to-earnings multiple of rival Charles Schwab.

Shares of Interactive Brokers (NASDAQ:IBKR) are currently trading near $89, which is approximately 10% below their 52-week high of $98.75. The valuation is steep, priced at roughly 29 times next year’s expected earnings—a premium typical of growth stocks rather than traditional brokerages.

The more pertinent question is what the business must achieve to drive the stock materially higher—specifically, a doubling by late 2031, which would require roughly 15% annualized compound growth.

Image source: Getty Images.

What Would a Double Require?

If the stock’s price-to-earnings multiple in 2031 matches its current level, shares would double as earnings per share double.

The company is clearing this bar with considerable room to spare. During the first half of 2026, net interest income increased by 20% year over year, commission revenue grew by approximately 25%, and earnings per share climbed 30%.

However, investors should not expect profit margins to contribute to this growth. Interactive Brokers already converts roughly 77% of its net revenues into pre-tax profit, a level with very little room left to expand.

Consequently, over the next five years, earnings growth should roughly track revenue growth. And revenue is ultimately dictated by the funds clients entrust to the broker and their trading activity.

The Balances Have Outrun the Rates

Net interest income represents the earnings the company generates from clients’ idle cash and the margin loans extended against their portfolios. This segment generated $2.8 billion in 2023, $3.1 billion in 2024, and $3.6 billion in 2025—accounting for 57% of last year’s net revenues and serving as the company’s largest revenue stream. Notably, this growth has occurred without assistance from interest rates. Although the Federal Reserve cut rates three times in the second half of 2025, growth accelerated from 13% last year to 20% in the first half of 2026, as client balances rose faster than rates fell.

For the interest income line to double by 2031 with rates remaining unchanged, the underlying balances would need to roughly double. Customers’ credit balances stood at $185.6 billion at the end of August, with margin loans at $101.5 billion—up 27% and 41%, respectively, year over year. Doubling these figures would place them near $370 billion and $200 billion.

Rates can still influence this line, of course. The Federal Reserve raised its benchmark rate by a quarter point on Sept. 16. Interactive Brokers estimates that a move of that magnitude in U.S. dollar rates would alter its annual net interest income by approximately $81 million in either direction (roughly 2% of the line’s current pace). Furthermore, the recent rise of the 10-year Treasury yield past 5% matters less than it might appear, as substantially all of the company’s investment portfolio matures within three months.

Margin loans remain the least reliable component. They reached $108.5 billion at the end of the second quarter before declining to $101.5 billion by the end of August, and a severe market downturn could shrink them far more rapidly.

Accounts Would Need to Double

After all, balances track customers, and the customer base continues to expand. Interactive Brokers finished August with 5.46 million client accounts—a 35% increase year over year—holding $962.8 billion in equity, which averages to roughly $176,000 per account.

If the money per account remains flat, doubling the balances necessitates doubling the accounts to roughly 11 million. This requires 15% yearly growth, and the base is currently compounding at 35%.

Put another way, account growth could decelerate by more than half, and the customer count would still double by 2031. Of course, an ugly bear market could stall the pace for a year or two. However, the requirement leaves ample room for exactly that.

Will the Premium Hold?

This leaves the stock’s price-to-earnings multiple—the part the company cannot control. Charles Schwab trades at roughly 13 times next year’s expected earnings, meaning Interactive Brokers commands more than double its rival’s valuation.

However, if earnings double over five years while the price-to-earnings multiple contracts from 29 to 20, the stock would return roughly 38% in total (about 7% annually). If the multiple holds, the same earnings growth would double the stock.

Where does all of this leave the stock in five years? Higher, I believe, and perhaps far higher. The greater unknown is the price-to-earnings multiple investors will assign in 2031, and I won’t claim to predict it. My expectations rest on the business itself, which remains the consistent half that continually shows up in the monthly metrics.

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