As of June 7, 2025, Interactive Brokers Group Inc's estimated intrinsic value ranges from $9.56 to $155.42 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $130.88 | -38.2% |
| Discounted Cash Flow (5Y) | $9.56 | -95.5% |
| Dividend Discount Model (Multi-Stage) | $155.42 | -26.6% |
| Dividend Discount Model (Stable) | $111.24 | -47.5% |
| Earnings Power Value | $49.72 | -76.5% |
Is Interactive Brokers Group Inc (IBKR) undervalued or overvalued?
With the current market price at $211.83, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Interactive Brokers Group Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.43 | 0.63 |
| Cost of equity | 5.9% | 8.4% |
| Cost of debt | 15.6% | 20.8% |
| Tax rate | 7.8% | 8.0% |
| Debt/Equity ratio | 0.18 | 0.18 |
| After-tax WACC | 7.2% | 10.0% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $10 | $17,446M | 118.6% |
| 10-Year Growth | $131 | $68,716M | 83.3% |
| 5-Year EBITDA | $52 | $35,419M | 109.1% |
| 10-Year EBITDA | $81 | $47,531M | 75.9% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $2,880M |
| Discount Rate (WACC) | 10.0% - 7.2% |
| Enterprise Value | $28,663M - $40,170M |
| Net Debt | $13,406M |
| Equity Value | $15,257M - $26,764M |
| Outstanding Shares | 423M |
| Fair Value | $36 - $63 |
| Selected Fair Value | $49.72 |
| Metric | Value |
|---|---|
| Market Capitalization | $89519M |
| Enterprise Value | $102925M |
| Trailing P/E | 112.89 |
| Forward P/E | 41.55 |
| Trailing EV/EBITDA | 17.60 |
| Current Dividend Yield | 12.06% |
| Dividend Growth Rate (5Y) | 30.21% |
| Debt-to-Equity Ratio | 0.18 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $39.26 |
| Discounted Cash Flow (5Y) | 25% | $2.39 |
| Dividend Discount Model (Multi-Stage) | 20% | $31.08 |
| Dividend Discount Model (Stable) | 15% | $16.69 |
| Earnings Power Value | 10% | $4.97 |
| Weighted Average | 100% | $94.40 |
Based on our comprehensive valuation analysis, Interactive Brokers Group Inc's weighted average intrinsic value is $94.40, which is approximately 55.4% below the current market price of $211.83.
Key investment considerations:
Given these factors, we believe Interactive Brokers Group Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.