NEW YORK (TheStreet) -- Shares of Interactive Brokers (IBKR - Get Report) were falling 6.8% to $26.34 Friday after the investment broker issued a statement about customer losses after Switzerland removed the cap on the Swiss franc's value.
Investment Brokers said that several of its clients "suffered losses in excess of their deposit" due to the "sudden move in the value of the Swiss franc." The company said that the debits amount to about $120 million, less than 2.5% of its net worth.
The Swiss franc grew about 28% against the U.S. dollar after Switzerland removed the cap on the currency's value against the euro, according to Reuters.
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TheStreet Ratings team rates INTERACTIVE BROKERS GROUP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTERACTIVE BROKERS GROUP (IBKR) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has increased to $242.99 million or 17.89% when compared to the same quarter last year. In addition, INTERACTIVE BROKERS GROUP has also vastly surpassed the industry average cash flow growth rate of -196.88%.
- Compared to its closing price of one year ago, IBKR's share price has jumped by 27.39%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- The revenue fell significantly faster than the industry average of 1.6%. Since the same quarter one year prior, revenues fell by 42.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 45.50% is the gross profit margin for INTERACTIVE BROKERS GROUP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, IBKR's net profit margin of 1.63% is significantly lower than the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Capital Markets industry and the overall market, INTERACTIVE BROKERS GROUP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: IBKR Ratings Report