Interactive Brokers Group has delivered very strong long term share gains, which puts extra attention on whether the current price is properly backed by the returns it earns on its capital. The recent pullback over the past month and week only sharpens that question for anyone trying to decide how much of that story is already reflected in the valuation.
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Over the past 5 years the stock is up about 356%, which puts a lot of weight on the quality and durability of the returns Interactive Brokers generates on the capital it uses in the business.
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Recent profit growth, higher client activity and a larger cash dividend can support expectations that the broker continues to earn solid returns on the equity and capital tied up in its trading and clearing operations.
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Prefer to judge Interactive Brokers Group on earnings? See what Interactive Brokers Group’s 33.3x P/E says about the price.
The issue now is whether the returns Interactive Brokers earns on its capital are strong enough, and reliable enough, to justify where the stock trades today.
If you want to stress test this same question about the returns earned on capital across a wider set of companies, compare Interactive Brokers Group with 33 high quality undervalued stocks.
Has Interactive Brokers Group Run Too Far on Excess Returns?
The Excess Returns model looks at how much profit Interactive Brokers Group can earn over and above the return that equity investors typically require. On this view, the focus is less on raw earnings and more on how efficiently the brokerage turns each dollar of shareholder capital into lasting value.
Interactive Brokers is modeled with Book Value of $13.10 per share and Stable Book Value of $18.30 per share, alongside Stable EPS of $3.40 per share. With an Average Return on Equity of 18.56% and a Cost of Equity of $1.56 per share, the framework implies an Excess Return of $1.83 per share, which is what the model treats as value created beyond investor expectations. Those assumptions sit against a traded price of $82.69, and the Excess Returns projections put Interactive Brokers Group’s estimated intrinsic value substantially below the current share price. The recent jump in profit and the higher cash dividend reported for Q3 2026 help explain why investors are still willing to pay up for the stock even where the model is more conservative about long run excess returns. Find out what Interactive Brokers Group could be worth using our Excess Returns estimate.
The Interactive Brokers Group Narrative: What Would Justify Today’s Price?
