E-Trade’s Growth Momentum Continued In August

by Trefis Team
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After a decent performance across key metrics in the first 7 months of the year, E-Trade (NASDAQ:ETFC) sustained its growth momentum in August. The brokerage saw a 30% year-over-year rise and 7% month-over-month rise in trading volumes during the month. The acquisition of OptionsHouse in mid-2016 and the recently closed TCA acquisition continued to contribute to growth in brokerage accounts and derivative trading volumes, with over 32% of trading volumes attributed to derivatives. Further, the TCA acquisition should provide for decent medium term growth.
We have a $63 price estimate for E-Trade’s stock, which is about in line with the current market price. Our interactive dashboard shows historical trends highlighting E-Trade’s strong growth in key metrics; you can modify our forecasts for the asset base, yield on assets and other key metrics to assess their impact on the company’s total revenues. You can also save your estimates and scenarios and share them using our interactive platform.

Interest-earning assets have also continued their strong growth throughout the year, in large part due to the rate hikes over recent months and the expectation of further interest rate hikes in the year ahead. The company generates over 60% of its revenue from interest-earning assets. As E-Trade has generally seen a higher yield on its interest-earning assets (2.8%) relative to most competitors, rate hikes should drive solid revenue growth for the company.

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