Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Interactive Brokers Group, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -33.1% to 30.0% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 3850, DPO 46217, DIO 60). At a 8.0% WACC with mid-year discounting, the terminal value (69% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $422.33 per share, suggesting IBKR is undervalued by 537.9% at the current price of $66.21.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 3,329 | 3,609 | 4,145 | 4,742 | 6,165 | 6,319 |
| (−) Net Interest | 2,222 | 2,408 | 2,767 | 3,165 | 4,115 | 4,218 |
| (+) D&A | 62 | 63 | 68 | 79 | 92 | 95 |
| EBITDA | 5,613 | 6,080 | 6,979 | 7,986 | 10,372 | 10,632 |
| (−) Tax | 274 | 297 | 341 | 390 | 507 | — |
| (−) CapEx | 83 | 90 | 104 | 119 | 154 | — |
| (−) ΔWC | 6,251 | -4,561 | -8,754 | -9,743 | -23,208 | — |
| Free Cash Flow (FCF) | -995 | 10,255 | 15,289 | 17,221 | 32,920 | — |
| Peers' EBITDA Multiple | 17.6x | |||||
| Terminal Value | 186,585 | |||||
| WACC / Discount Rate | 8.00% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -957 | 9,136 | 12,611 | 13,153 | 23,279 | 126,959 |
| Enterprise Value | 184,181 | |||||
| Projection Period | 57,222 | 31.1% | ||||
| Terminal Value | 126,959 | 68.9% | ||||
| (−) Current Net Debt | (4,944) | |||||
| Equity Value | 189,125 | |||||
| (÷) Outstanding Shares | 448M | |||||
| Fair Price | $422 | +537.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.6x | 15.6x | 17.6x | 19.6x | 21.6x |
|---|---|---|---|---|---|
| 6.0% | $388 | $423 | $459 | $494 | $529 |
| 7.0% | $372 | $406 | $440 | $474 | $508 |
| 8.0% | $358 | $390 | $422 | $455 | $487 |
| 9.0% | $344 | $375 | $406 | $436 | $467 |
| 10.0% | $331 | $360 | $390 | $419 | $449 |
Current price: $66.21. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.