Shares of financial services provider Charles Schwab (NYSE:SCHW) are plunging today after the company’s lackluster second-quarter numbers failed to impress investors.
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SCHW’s Lackluster Q2 Numbers
During the quarter, revenue inched up by 0.6% to $4.69 billion. The figure fared better than expectations by a not-so-impressive margin of $10 million. Similarly, SCHW’s EPS of $0.73 outpaced consensus by a wafer-thin margin of $0.01. This was a year-over-year decline of nearly 3% in the company’s bottom line.
In Q2, SCHW’s core net new assets rose by 17% to $61.2 billion and active brokerage accounts rose by 4% to 35.6 million. Furthermore, its total client assets ballooned to a record $9.41 trillion. Importantly, the company experienced a year-to-date growth of 40% in its Schwab Wealth Advisory unit.
Despite this promising growth, SCHW’s adjusted pre-tax profit margin contracted to 41% from 42% a year ago. Additionally, its annualized return on stockholders’ equity declined to 14% from 17%.
Is SCHW Stock a Buy, Sell, or Hold?
Consequently, SCHW’s shares are down by nearly 5% today. Overall, the Street has a Moderate Buy consensus rating on Charles Schwab, alongside an average SCHW price target of $81.23. However, analysts’ views on the company could see changes following today’s earnings report.
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