This brokerage stock is 50% cheaper than Robinhood. Josh Brown sees an opportunity to buy the dip
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — On August 28th we told you about a breakout in progress for Interactive Brokers , which had been hanging around on our list of the Best Stocks in the market for a while without having made its move yet. The stock ran from the low $60s into the low $70s over the next six weeks. I wanted to call your attention back to IBKR on the heels of its latest earnings report because I think we just got a new entry level. IBKR trades at half the valuation of Robinhood , but is in all the same markets and running toward the same growth opportunities — institutional custody, crypto trading and accumulation, retail brokerage, etc. The company was added to the S & P 500 this summer and the founder of the company, Thomas Peterffy, is 81 years old with a 67% ownership stake in the equity. As the prediction markets, sports betting markets, crypto markets and retail brokerage markets all converge, IBKR could be a crown jewel for any one of a dozen would-be acquirers. I don’t believe the stock has as much of a premium baked into its valuation as it should given this very obvious reality. Sean’s going to give you some insights into why the pullback post-earnings means a new entry point for the bulls. I’ll be back with a chart and some risk management commentary. Best Stock Spotlight: Interactive Brokers Group, Inc. (IBKR) On the list since: 7/8/2025 One-year price chart: Sean — IBKR was down about 3% following the release of quarterly earnings last week. The company beat expectations for both revenue and EPS, with record revenue of $1.6 billion up 21% year-over-year and adjusted EPS of $0.57 up from $0.40 last year – an astounding 43% growth. The market was most likely disappointed in the declining net interest margin IBKR is earning as the Fed begins to cut rates. IBKR’s net interest margin fell to 2.16% from 2.37% a year ago. In addition, the annualized yield on margin loans declined from 5.73% to 4.6%. IBKR bulls are taking this as a buying opportunity. The current account growth IBKR is seeing is offsetting the interest income decline the business is about to experience. Customer accounts were up 30% year-over-year. Client equity on the platform was over $250 billion, up 40% from last year. In other words, the volume of account growth and scale at which those accounts are growing assets and trading assets is more than offsetting any net income loss due to lower rates. The company reported commission revenue up 23% year-over-year, options contract volumes up 27% and crypto trade volumes up 87% sequentially from last quarter, up 5x year-over-year. IBKR is also introducing new features to the platform including recurring crypto buy orders, more coins available to more investors globally, and proprietary tools for investment research. We pitched IBKR as a diet-Robinhood. You get the same thematic exposure at a discount. Well, the same is true today. HOOD has higher growth expectations for the coming quarters, hence the 62x trailing PE ratio. IBKR comes in much tamer at a trailing 31x PE and a forward 28x earnings, while expecting 20% EPS growth this year and 10% growth next year. Risk management Josh — IBKR should remain a leadership stock as the bull market continues into year-end. We don’t know for sure that it will, which is why we talk about risk and support levels we want to see hold. Interactive Brokers found support at the $59-$61 level that had been the old resistance back in February. You can see it above plain as day — the buyers came in exactly where they had to. Despite its recent pullback, RSI in the high 50s and rising is also what you want to see here as this name sets up for another attempt into the 70s. I like $45 as a stop here for investors. Traders can continue to key off of that $59 level as a sign of a breakdown. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. 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