2 Brokerage Stocks to Buy Before Their October Earnings Reports

Shares of Interactive Brokers (NASDAQ:IBKR) trade near $88 as of this writing, about 11% off their 52-week high of $98.75. And Charles Schwab (NYSE:SCHW) stock is near $97, about 15% under its 52-week high.

But the monthly numbers both brokers release keep coming in strong. Interactive Brokers finished September with 35% more client accounts than a year before. Schwab's clients, meanwhile, brought a record-for-August $64.8 billion of new money to the firm, up 46% from August 2025.

Both companies should give investors a fuller look at the third quarter in mid-October. Interactive Brokers reports on Thursday, Oct. 15, after the market closes. Schwab has a business update webcast set for the same morning, and it released last year's third-quarter results on Oct. 16.

Are these two stocks worth buying ahead of their reports? I think so, but not for the same reasons.

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1. Interactive Brokers keeps adding accounts faster

Interactive Brokers' account growth has gained speed this year. The online broker's client accounts grew 31% year over year in the first quarter, 34% in the second quarter, and 35% at the end of September, when the total hit 5.58 million. The money in these accounts grew, too. Client equity rose 27% year over year to $964.7 billion, and margin loans (money clients borrow against their holdings) climbed 36% to $105.2 billion.

Trading, though, cooled in September. Daily average revenue trades (the broker's count of client orders that bring in revenue) grew just 6% year over year to 4.1 million, after jumping 36% in the second quarter. That matters because commissions are the broker's second-largest revenue source, after net interest income. So the slowdown may show up in the third-quarter report.

But the business behind these accounts is impressively profitable. Interactive Brokers' second-quarter net revenue grew 28% year over year to $1.9 billion, and earnings per share climbed 35% to $0.69. The company kept 77% of its net revenue as pre-tax profit, up from 75% a year before.

Investors are paying up for that, of course. After all, shares trade at around 27 times next year's expected earnings, a rich price-to-earnings multiple for a broker. At that price, investors are betting on accounts compounding at roughly today's rate.

2. Schwab's clients keep bringing in money

True, Schwab adds customers more slowly. Its 40.1 million active brokerage accounts were up 6% year over year at the end of August.

But the money keeps rolling in. Clients brought $64.8 billion in core net new assets (the new money clients bring to Schwab, net of withdrawals and excluding certain unusual flows) to the company in August.

Add July's $58.1 billion, and the first two months of the third quarter brought in around $123 billion. That total is already near the $137.5 billion Schwab gathered in the entire third quarter of 2025 -- a quarter that was itself up 44% year over year.

Those flows are turning into profit. Schwab's revenue hit a record in the second quarter at $7.1 billion, up 21% from a year earlier. Excluding costs from past acquisitions, non-GAAP (adjusted) earnings per share were $1.62, 42% higher than a year before. What's more, the company's adjusted pre-tax profit margin rose from 50.1% a year before to 54.3%.

Like Interactive Brokers, Schwab saw trading cool off. Its clients made 9.8 million trades a day on average in August, up 37% from a year earlier but below the second quarter's record of 11.9 million.

And Schwab's stock costs much less. It trades at around 12 times next year's expected earnings, under half Interactive Brokers' price-to-earnings ratio, even though Schwab's adjusted earnings per share rose faster in the second quarter.

Worth buying before mid-October?

Of course, neither report is a sure bet. Trading that cooled after the second quarter could weigh on both firms' third-quarter results, and either stock could move sharply when the numbers land.

But one quarter matters less than whether clients keep bringing their money. And on that count, both firms' latest monthly numbers show they are.

Interactive Brokers is the faster-growing business, with account growth that's sped up through 2026.

Schwab is arguably the better value. At around 12 times next year's expected earnings, its stock doesn't seem to assume much more than steady growth from here.

In the end, I think both stocks are worth considering ahead of their reports. Schwab looks like the easier buy at today's price. Interactive Brokers is one I'd consider buying gradually, given how much growth its higher price already assumes.

Charles Schwab is an advertising partner of Motley Fool Money. Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Interactive Brokers Group. The Motley Fool recommends Charles Schwab and recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group, short January 2027 $46.25 calls on Interactive Brokers Group, and short September 2026 $95 calls on Charles Schwab. The Motley Fool has a disclosure policy.