Robinhood Markets HOOD and Interactive Brokers Group IBKR are prominent online brokerage players offering commission-free trading platforms. Robinhood appeals to newer, mobile-first retail investors, while Interactive Brokers serves more advanced traders with its comprehensive tools.
With the stock markets witnessing massive volatility and client activity, HOOD and IBKR are expected to benefit from increased trading activities. As such, investors are bullish on both. This year, shares of HOOD have soared 65.8%, while Interactive Brokers is up 18.4%. Also, stocks have fared better than the industry, the Zacks Finance sector and the S&P 500 Index in the same time frame.
HOOD & IBKR YTD Price Performance
Zacks Investment Research
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So, the question arises: which brokerage stock — Robinhood or Interactive Brokers — offers greater upside in the evolving trading market? Let’s break down their fundamentals, financial performance, growth prospects and more before taking any decision.
The Case for Robinhood
Robinhood became extremely popular among younger generations in early 2021, riding on the meme stock wave. Nonetheless, since its IPO in July 2021, a lot has happened on the business front. It has evolved from a brokerage firm primarily trading in digital assets to a more mature and diversified entity, striving to become a one-stop shop for building generational wealth.
In this context, HOOD has launched several initiatives to attract more clients and strengthen its market share. Some notable ones are Robinhood Strategies, Robinhood Banking and Robinhood Cortex to boost the wealth management offerings; the prediction markets hub; a credit card and a desktop trading platform.
Additionally, Robinhood is expanding via strategic acquisitions, which are helping it foray into new businesses and complement existing ones. On Tuesday, it announced an agreement to buy Canada-based WonderFi Technologies Inc. in a C$250 million all-cash deal, which will help deepen its presence in the Canadian digital asset market. In February 2025, it completed the $300 million acquisition of TradePMR, a custodial and portfolio management platform specializing in services for Registered Investment Advisors.
Also, in July 2024, Robinhood acquired Pluto Capital Inc. With the integration of Pluto’s advanced capabilities, the company has revolutionized the investment experience for its users. Further, the impending buyout of Bitstamp (announced in June 2024), a globally recognized cryptocurrency exchange (featuring more than 85 tradable assets and popular in Europe and Asia), will significantly enhance the company’s crypto offerings.
Hence, these efforts reflect HOOD’s ambition to become a full-spectrum financial services provider.
HOOD Sales Estimates
Zacks Investment Research
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The Case for Interactive Brokers
Interactive Brokers’ technological superiority remains one of its strongest aspects. The company processes trades in stocks, futures, options and forex on more than 150 exchanges across several countries and currencies.
Superior technology usage has kept IBKR’s compensation expense relative to net revenues (10.8% in the first quarter of 2025) below its industry peers. Further, the company has been emphasizing developing proprietary software to automate broker-dealer functions, leading to a steady rise in revenues.
Interactive Brokers is expanding globally with a series of strategic moves. Earlier this month, it extended trading hours for Forecast Contracts to nearly 24 hours, after having launched them in Canada. In the U.K., it added mutual funds to its ISA offerings, enhancing tax-efficient investing. IBKR also introduced PEA accounts in France and expanded mobile trading via GlobalTrader. Other innovations include almost 24 hours of Overnight Trading on U.S. stocks and ETFs, crypto trading through Paxos with low fees and the launch of IBKR Desktop, a next-gen trading platform for Windows and Mac, underscoring its focus on advanced, global trading solutions.
The company’s technological superiority, combined with easier regulations to improve product velocity, will support its net revenues through higher client acquisitions. Net revenues are also expected to strengthen further in the quarters ahead, given the solid Daily Average Revenue Trades (DARTs) numbers and robust trading backdrop driven by higher market participation.
IBKR Sales Estimates
Zacks Investment Research
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How Do Estimates Compare for HOOD & IBKR?
The Zacks Consensus Estimate for HOOD’s 2025 and 2026 earnings indicates an 11.9% and 19.4% rise for 2025 and 2026, respectively. Over the past month, earnings estimates for 2025 have remained unchanged, while for 2026, the same have been revised upward.
Earnings Trend
Zacks Investment Research
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On the contrary, analysts are less optimistic about IBKR’s prospects. The consensus mark for earnings suggests 0.4% and 7% growth for 2025 and 2026, respectively. Earnings estimates for both years have been revised lower over the past 30 days.
Earnings Trend
Zacks Investment Research
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Hence, on earnings growth prospects, HOOD clearly has an edge over Interactive Brokers.
Robinhood & Interactive Brokers: Valuation & Other Comparisons
Valuation-wise, HOOD is currently trading at the 12-month forward price-to-earnings (P/E) of 47.17X. The IBKR stock, on the other hand, is currently trading at the 12-month trailing P/TB of 28.86X. Further, both are trading at a premium to the industry average of 13.82X.
P/E F12M
Zacks Investment Research
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While Robinhood commands a premium over Interactive Brokers, its valuation is justified, given its superior growth trajectory.
Additionally, HOOD’s return on equity (ROE) of 15.42% is way above IBKR’s 4.97%. HOOD also outscores the industry ROE of 11.97%. This reflects Robinhood’s efficient use of shareholder funds to generate profits.
ROE
Zacks Investment Research
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HOOD & IBKR: Which Stock Indicates Long-Term Gains?
HOOD has undergone a significant transformation since its IPO, evolving from a disruptive trading app into a comprehensive financial services platform. Through strategic acquisitions, it is aggressively expanding its product suite and global reach. It’s also investing in advanced tools like Robinhood Cortex and Robinhood Strategies, targeting a broader investor base. These innovations, paired with a robust ROE and accelerating earnings and sales growth estimates through 2026, suggest strong long-term upside potential.
On the other hand, Interactive Brokers remains a dominant, tech-driven brokerage favored by professional and institutional investors. Its global reach, low-cost model and powerful trading tools continue to support consistent revenue growth. However, while the company’s innovation in areas like Forecast Contracts, GlobalTrader and IBKR Desktop is impressive, its earnings outlook is more muted, with only modest growth expected in the next two years. Combined with a lower ROE and downward revisions to earnings estimates, this suggests that while IBKR is a stable, well-run business, it may not match HOOD’s upside potential in a growth-focused portfolio.
Thus, Robinhood appears to be the better long-term investment for solid returns.
At present, Robinhood and Interactive Brokers carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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