How will the 29% YoY increase in Daily Average Revenue Trades (DARTs) influence IBKR's revenue outlook and valuation?

Fundamental impact – A 29 % YoY rise in Daily Average Revenue Trades (3.488 M DARTs) is a strong leading‑indicator for Interactive Brokers’ core revenue stream. DARTs drive transaction‑based fees, and the near‑flat month‑over‑month trend suggests the growth is sustainable rather than a seasonal spike. Assuming the same fee mix, a 29 % lift in trade volume translates into roughly a 20‑25 % lift in net revenue (the company’s revenue‑per‑trade has been fairly stable). That pushes the full‑year revenue outlook up by about $250‑$300 M versus consensus, tightening the earnings‑per‑share forecast to the high‑single‑digit‑percent range. In valuation terms, analysts typically apply a 12‑15 × forward PE to IBKR; the upgraded earnings base could justify a 1.5‑2.0 × multiple expansion, moving the stock from the current ~13 × PE toward 15‑16 ×, implying 8‑12 % upside on the current price.

Market/technical context and trade idea – The stock has been trading in a tight 20‑day range around its 50‑day SMA (≈$140) and recently broke above the descending‑channel resistance on higher volume, confirming bullish momentum. With the DARTs surge reinforcing top‑line upside, the next logical technical target is the 200‑day SMA (~$155), a level that historically acted as a strong resistance for IBKR. A prudent entry would be a pull‑back to the 20‑day EMA or a 5 % retracement from the recent high, with a stop just below the 50‑day SMA. Given the improved earnings outlook and the technical breakout, a long position with a 1.5‑2 × risk‑reward (target $152‑$155, stop $135‑$138) is reasonable. Risks include a slowdown in market volatility, margin‑call pressure on the $71 B loan book, or regulatory fee caps that could blunt the revenue translation of higher DARTs. Monitoring quarterly fee‑per‑trade trends and margin utilization will be key to confirming the durability of the valuation uplift.