It has been about a month since the last earnings report for Interactive Brokers Group, Inc. (IBKR Quick QuoteIBKR - Free Report) . Shares have added about 3.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Interactive Brokers Group, Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Interactive Brokers Q4 Earnings Beat, Expenses Rise Y/Y

Interactive Brokers’ fourth-quarter 2021 adjusted earnings per share of 83 cents surpassed the Zacks Consensus Estimate of 82 cents. The bottom line reflects growth of 20.3% from the prior-year quarter.

The company recorded a marginal rise in revenues in the quarter under review. An increase in DARTs further aided the results. The capital position also remained strong. However, higher expenses hurt results to some extent.

After considering non-recurring items, net income available to common shareholders (GAAP basis) was $67 million or 67 cents per share, down from $71 million or 81 cents per share in the prior-year quarter.

Interactive Brokers reported comprehensive income available to common shareholders of $66 million or 67 cents per share in the reported quarter compared with $97 million or $1.05 per share recorded in the prior-year quarter.

For 2021, adjusted earnings per share were $3.37, which lagged the Zacks Consensus Estimate of $3.39. However, the bottom line reflects growth of 35.3% from the prior year. Net income available to common shareholders (GAAP basis) was $308 million or $3.24 per share, up from $195 million or $2.42 per share in 2020.

Revenues Improve, Expenses Rise

Total quarterly GAAP net revenues were $603 million, up marginally year over year. The top line missed the Zacks Consensus Estimate of $650 million. Adjusted net revenues were $683 million, up 17.4%.

For 2021, GAAP net revenues were $2.71 billion, up 22.4% year over year. The top line missed the Zacks Consensus Estimate of $2.76 billion.

Total quarterly non-interest expenses increased 11.1% year over year to $230 million. The rise was due to an increase in all cost components, except for execution, clearing and distribution fees.

Income before income taxes was $373 million, down 4.8% from the prior-year quarter.

The adjusted pre-tax profit margin was 66%, up from 64% a year ago.

In the reported quarter, total customer DARTs increased 15.5% year over year to 2.44 million. Total cleared DARTs jumped from 1.87 million to 2.16 million.

Additionally, customer accounts grew 56.2% from the year-ago quarter to 1,676,000.

Capital Position Strong

As of Dec 31, 2021, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $40.46 billion compared with $48 billion as of Dec 31, 2020.

As of Dec 31, 2021, total assets were $108.95 billion compared with $95.68 billion as of Dec 31, 2020. Total equity was $10.22 billion, up from $9 billion as of Dec 31, 2020.

Outlook

The company expects the next 25-bps rise in interest rates to produce an additional $165 million in net interest income annually.

How Have Estimates Been Moving Since Then?

Estimates review followed an upward path over the past two months.

VGM Scores

At this time, Interactive Brokers Group, Inc. has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Interactive Brokers Group, Inc. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.