GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
Interactive Brokers is expensive against its earnings. At $89.98 it trades at 36x earnings and 28x next year's, while brokerages usually get 12x. At 12x next year's estimated $3.20 a share, give or take 12%, fair value is $33.75-$42.96, so buyers are paying about 109% above fair. This is a valuation read only, not fundamental work. x.comÂ
Meta's next-year earnings consensus of $34 a share makes a 30x forward multiple too optimistic unless it delivers a major surprise. The proliferation of $1,000 price targets also looks like a warning to get out. x.com x.comÂ
Robinhood is likable, but competition in prediction markets is a growing concern as Schwab and Interactive Brokers enter, and its sweep program could become a problem. The chart is also a mess, and Interactive Brokers looks best of the three brokers. x.comÂ
Interactive Brokers' lean, high-margin brokerage is generating rising net interest income. It is the 'big boy' broker, not Robinhood: its clients have real money on the line. In Q3 FY26, net revenue rose 16% to $1.914 billion and net interest income 19% to $1.154 billion year over year; basic EPS rose 17% to $0.69. Net income to common was $314 million of $1.348 billion total, with most going to noncontrolling partnership interests by design. Grade: A. x.comÂ
Robinhood, Interactive Brokers and Coinbase face prediction-market regulation in the near future, which would hurt their margins, revenue and profits. x.comÂ
Webull still looks too bubbly on valuation compared with other fintechs, even though it is a good broker. x.comÂ
Interactive Brokers' 31% account growth is no one-quarter phenomenon, because retail trading is increasingly international and less US-centric. With under 5 million accounts versus Robinhood's roughly 27 million, it could add 3 million in a year or even beat Robinhood's 10 million in 2021, as traders now accept less user-friendly platforms, as Polymarket shows. Its valuation is no longer anomalous versus peers, but modest multiple expansion and a few more such quarters point to roughly 2x. x.comÂ
Robinhood's growth is almost entirely gambling: excluding prediction-market revenue, its top line was basically flat year over year, yet the stock trades at more than 50x earnings. x.com x.comÂ
Webull looks too cheap and Robinhood too expensive. Webull's Q2 revenue rose 51%, options volume 68%, equity volume 73% and operating profit 169%, with a 31% operating margin and AUM up 79%. It trades at 4.6x 2026 and 3.7x 2027 EV/revenue, versus 18.8x and 14.8x for Robinhood, which is a much bigger, better company but has only 6.5x more revenue with 26x the enterprise value. On 2027 non-GAAP EPS estimates, Webull trades at 25x versus 31x for Robinhood. x.com x.comÂ
Interactive Brokers is a fantastic business because it is basically a tech company. Its fully automated platform keeps costs low, supporting operating margins above 70% and the industry's lowest fees, and one account can trade almost anything in over 150 markets, a scale no rival matches. Its software is too complex for beginners, leaving the mass market to competitors like Robinhood, and complex international regulation is costly. It is a powerful cash machine with a great moat. x.comÂ
