On Wednesday, Interactive Brokers Group Inc. (NASDAQ:IBKR) shares advanced slightly after announcing its fiscal third-quarter results. The company reported its most recent quarterly results Tuesday after markets closed, beating analyst expectations on non-GAAP earnings and revenue.
IBKR posted FQ3 non-GAAP earnings per share of $0.78, narrowly beating the consensus Street estimate of $0.76. On the other hand, its GAAP EPS of $0.43 was significantly below the average for analyst expectations of $0.77, while revenue for the quarter increased by 18.6% from the same period a year ago to $650 million, $10.85 million ahead of estimates.
Interactive Brokers shares have gained more than 25% in market value over the last four weeks, subsequently recouping losses of the last six months.
Should you bet on IBKR’s growth?
From an investment perspective, Interactive Brokers shares trade at reasonable 12-month trailing and forward P/E ratios of 20.75 and 24.11, respectively.
Moreover, analysts expect the company’s earnings per share to rise by 15.4% this year, before increasing at an average annual rate of 19.80% over the next five years.
Therefore, the stock looks like an ideal opportunity for growth investors willing to overlook potential turbulence in the short term.
Source – TradingView
Technically, Interactive Brokers shares seem to be trading within an ascending channel formation in the intraday chart. As a result, the stock has rallied to the overbought conditions of the 14-day RSI. Therefore a pullback could be on the horizon.
Investors could target potential pullbacks at about $71.70, or lower at $69.18, while $76.84 and $79.25, are crucial resistance zones.
Time to take some profits?
In summary, although Interactive Brokers stock offers exciting growth prospects at reasonable valuation multiples, the share price seems to have spiked to overbought conditions, thus creating an opportunity for a pullback.
Therefore, with the stock up more than 25% over the last four weeks, it could be time to take some profits off IBKR shares.
The post Should you wait to buy Interactive Brokers shares after a narrow earnings beat? appeared first on Invezz.