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TD Ameritrade Is Positioned for Higher Growth in the Near Future

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Updated

Meets estimates

TD Ameritrade’s (AMTD) stock has appreciated by approximately 11% over the past 12 months. However, the stock is off its highs following the announcement of the company’s second-quarter earnings. The company’s market capitalization has declined to $19.7 billion.

TD Ameritrade reported net profits of $197 million in 3Q15, which ended on June 30, 2015. This compares to $188 million in 3Q14. The company reported earnings per share (or EPS) of $0.36 in 3Q15, meeting Wall Street estimates.

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In a July 21 company press release, TD Ameritrade CEO Fred Tomczyk noted, “As we complete our third quarter and look back on the last nine months, we remain upbeat about our growth and prospects for another strong year. We continue to execute well against our growth strategy, with $47 billion in net new client assets gathered year to date, an organic growth rate of 10 percent and up 17 percent over last year. Likewise, average client trades per day, year to date, are 456,000, up 5 percent over last year. This leaves us with good momentum, and we will continue to invest in organic growth initiatives.”

Financial services

TD Ameritrade Holding is a financial services company. The company provides securities brokerage services and related technology-based financial services to traders, retail investors, and independent registered investment advisers (or RIAs). It provides its services through the Internet, through a national branch network, and through its relationships with RIAs.

Its services cater to clients trading in common and preferred stocks, futures and options, foreign exchange, American depository receipts, closed-end funds, new and secondary issue securities, exchange-traded funds or ETFs, mutual funds, margin lending, cash management services, fixed-income securities, and annuities. TD Ameritrade provides client offerings primarily through trading and investing platforms.

Here’s how some of TD Ameritrade’s peers in the brokerage industry fared with their respective quarterly earnings:

  • Interactive Brokers (IBKR) beat estimates by 16%.
  • E*TRADE (ETFC) beat estimates by 4%.
  • Charles Schwab (SCHW) beat estimates by 4%.

Together, these companies form 1.31% of the Financial Select Sector SPDR Fund (XLF).

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