Is Interactive Brokers (IBKR) Still a Buy After Its Recent Stock Split and Strong Earnings Growth?

Interactive Brokers Group (IBKR) has long been a darling of value-driven growth investors, and its recent 4-for-1 stock split in June 2025 has reignited debates about its valuation and long-term potential. For those who missed the boat on its historic 610% surge since its 2007 IPO, the split—a rare move for a company with a premium 29x forward P/E—raises a critical question: Is this the optimal entry point for patient investors, or does the stock's lofty valuation and recent user criticisms justify caution?

The Case for IBKR: Efficiency, Growth, and Strategic Expansion

Interactive Brokers' financials tell a story of disciplined execution. In Q2 2025, the company maintained a 75% pretax profit margin, outpacing the industry average of 10% for U.S. brokerage firms. This stark contrast underscores IBKR's operational superiority, driven by low-cost infrastructure and a focus on institutional-grade tools that minimize overhead. While competitors grapple with margin compression from low-cost alternatives and litigation-driven headwinds, IBKR's margin expansion reflects its ability to scale without sacrificing profitability.

The company's product innovation pipeline further strengthens its value proposition. In 2024–2025, IBKR launched 24/7 trading for Forecast Contracts, expanded into prediction markets in Canada, and added derivatives on Bursa Malaysia to its Asian footprint. These moves position IBKR as a leader in democratizing access to niche financial instruments, a trend that aligns with rising demand for event-driven trading strategies. Additionally, the GlobalTrader app and PEA accounts for French clients highlight its commitment to global accessibility, a key driver of customer acquisition.

User growth metrics reinforce this narrative. As of August 2025, IBKR reported 3.96 million customer accounts, up 32% year-over-year, alongside a 50% surge in daily active revenue trades (DARTs) and $685.8 billion in client equity. These figures suggest that the company is not only attracting new users but also deepening engagement—a critical factor for sustaining long-term revenue growth.

The Stock Split: A Catalyst for Liquidity and Accessibility

The 4-for-1 split, effective June 17, 2025, reduced the share price from ~$160 to ~$40, making the stock more accessible to retail investors. Historically, companies that split stocks often see outperformance in the 12 months post-announcement, as seen in Bank of America's research on the S&P 500. For IBKR, this could amplify its appeal to a broader audience, particularly as its institutional-grade tools become more approachable for individual traders.

The split also signals confidence in the company's trajectory. Unlike many tech firms that rely on speculative narratives, IBKR's growth is rooted in tangible metrics: a 24% increase in margin loans to $63.7 billion and a 35% rise in client equity. These metrics indicate that users are not just opening accounts but actively leveraging IBKR's platform for trading and investment, a sign of sticky customer behavior.

Addressing the Critics: Complexity and Customer Service Concerns

No investment is without risks, and IBKR is no exception. Critics highlight the platform's steep learning curve, particularly for beginners. The Trader Workstation (TWS) and IBKR Desktop, while powerful, require significant time to master, and the Trader's Academy has been criticized for skipping foundational concepts like “What is a stock?” This complexity could deter casual investors, though it also creates a moat against competitors offering simpler, less feature-rich platforms.

Customer service has also drawn mixed reviews. While connection times are efficient, professionalism scores lag, with users reporting overly technical support that fails to address basic queries. Additionally, the discontinuation of U.S. Debit Card and Bill Pay services in May 2024 has alienated users seeking integrated banking solutions. However, these trade-offs appear to be part of a strategic pivot toward pure-play investment services, a move that could resonate with core users prioritizing trading over cash management.

Valuation: Expensive, But Justified?

At 29x forward earnings, IBKR trades at a premium to the S&P 500's ~20x multiple. Yet, this premium is warranted when considering its 94.35% gross margin (per the Investment Services Industry average) and its ability to scale profitably. For value-driven growth investors, the key is whether IBKR can sustain its KPI growth while maintaining margins. The company's expansion into prediction markets and 24/7 trading suggests it is innovating in high-margin areas, which could justify the valuation.

Investment Thesis: A Buy for the Long-Term

Despite its criticisms, Interactive Brokers remains a compelling buy for investors with a 5–10 year horizon. The stock split enhances liquidity, the valuation is supported by robust margins and growth, and the company's product roadmap aligns with rising demand for global and event-driven trading. While user complaints about complexity and customer service are valid, they also reflect IBKR's focus on serving sophisticated traders—a niche where it holds a dominant position.

For those wary of the premium valuation, the split provides a more accessible entry point. However, investors should monitor IBKR's ability to retain users amid competition from platforms like Robinhood and Webull, which prioritize simplicity over depth. If IBKR can balance innovation with user-friendly improvements—such as expanding its educational content or reintroducing basic banking features—it could solidify its position as a long-term winner in the evolving brokerage landscape.

In conclusion, Interactive Brokers' stock split and earnings growth present a rare opportunity to invest in a company that combines operational excellence, strategic innovation, and sustainable growth. For value-driven investors willing to navigate its complexities, IBKR remains a buy—provided they align with its mission to empower active, informed traders in a global market.