Charles Schwab (SCHW) AI Stock Analysis

• Market Cap: $175.23B
• Dividend Yield: 1.09%
• Average Volume (3M): 8.50M
• Price to Earnings (P/E): 26.0
• Beta (1Y): 1.11
• Revenue Growth: 4.64%
• EPS Growth: 54.26%
• Country: US
• Employees: 32,100
• Sector: Financial
• Sector Strength: 64
• Industry: Financial - Capital Markets
• EPS (TTM): 1.14
• Shares Outstanding: 1,816,970,300
• 10 Day Avg. Volume: 8,287,964
• 30 Day Avg. Volume: 8,504,699
• PEG Ratio: 1.29
• Price to Book (P/B): 2.80
• Price to Sales (P/S): 5.20
• P/FCF Ratio: 66.00
• Enterprise Value/Market Cap: 0.72
• Enterprise Value/Revenue: 5.56
• Enterprise Value/Gross Profit: 7.52
• Enterprise Value/Ebitda: 9.66
• 1Y Price Target: $104.93
• Price Target Upside: 8.80% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

• Rating: 74 Outperform
• Price Target: $107.00 ▲(10.95% Upside)

The overall stock score is driven by strong earnings growth and positive technical indicators. While financial performance shows profitability, challenges in revenue growth and liability reliance exist. Valuation metrics suggest a moderate pricing level.

Positive Factors

Earnings Performance

Improved earnings trajectory with momentum building for Charles Schwab Corp.

Financial Outlook

Better asset management and administrative fees and expenses contribute to positive financial outlook.

Negative Factors

Net New Assets

Schwab's annualized net new assets decelerated partly due to tax seasonality, indicating slower organic growth.

Organic Growth

Schwab's organic growth is significantly lagging behind its peers, which is a main factor for the Underperform rating.

Charles Schwab Business Overview & Revenue Model

Company Description

The Charles Schwab Corporation, together with its subsidiaries, provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The company operates in two segments, Investor Services and Advisor Services. The Investor Services segment provides retail brokerage, investment advisory, banking and trust, retirement plan, and other corporate brokerage services; equity compensation plan sponsors full-service recordkeeping for stock plans, stock options, restricted stock, performance shares, and stock appreciation rights; and retail investor and mutual fund clearing services, as well as compliance solutions. The Advisor Services segment offers custodial, trading, banking, and support services; and retirement business and corporate brokerage retirement services. This segment provides brokerage accounts with equity and fixed income, margin lending, options, and futures and forex trading; cash management capabilities comprising third-party certificates of deposit; third-party and proprietary mutual funds; plus mutual fund trading and clearing services; and exchange-traded funds (ETFs), including proprietary and third-party ETFs. It also offers advice solutions, such as managed portfolios of proprietary and third-party mutual funds and ETFs, separately managed accounts, customized personal advice for tailored portfolios, and specialized planning and portfolio management. In addition, this segment provides banking products and services, including checking and savings accounts, first lien residential real estate mortgage loans, home equity lines of credit, and pledged asset lines; and trust services comprising trust custody services, personal trust reporting services, and administrative trustee services. As of December 31, 2021, the Company had approximately 400 domestic branch offices in 48 states and the District of Columbia, as well as locations in Puerto Rico, the United Kingdom, Hong Kong, and Singapore. The Charles Schwab Corporation was incorporated in 1971 and is headquartered in Westlake, Texas.

How the Company Makes Money

Charles Schwab makes money primarily through three key revenue streams: asset management and administration fees, net interest revenue, and trading revenue. Asset management and administration fees are generated from the management of client assets in mutual funds, exchange-traded funds (ETFs), and other investment products. Net interest revenue comes from interest earned on client cash balances, loans, and securities lending, as well as from the company's own investment portfolio. Trading revenue is derived from commissions and fees on client trading activity, including equities, options, futures, and fixed income. The company has strategic partnerships with independent investment advisors and benefits from a strong brand reputation, which contributes to its ability to attract and retain a large client base.

Charles Schwab Financial Statement Overview

Summary

Charles Schwab shows strong profitability and cash flow generation, with healthy margins and a solid ROE. However, recent revenue declines and a high reliance on liabilities pose challenges.

Income Statement

The company's TTM (Trailing-Twelve-Months) gross profit margin stands at approximately 73.96%, indicating strong operational efficiency. However, the net profit margin is around 32.12%, showing healthy profitability but a decrease from previous years. The revenue growth rate from 2024 to TTM is negative, suggesting a decline in revenue generation. The EBIT margin is at 12.38%, and the EBITDA margin is at 52.06%, both indicating solid earnings before interest and taxes, though lower than past performance.

Balance Sheet

The debt-to-equity ratio is 0.74, suggesting a moderate level of leverage. Return on Equity (ROE) is calculated at 19.17% for TTM, reflecting strong profitability relative to equity. The equity ratio of 8.99% highlights a low proportion of equity in the total assets, indicating potential liquidity risks. The financial position is stable but relies significantly on liabilities.

Cash Flow

The free cash flow growth rate has significantly improved, showing strong cash generation capability. The operating cash flow to net income ratio is 1.14, suggesting efficient cash conversion. However, the free cash flow to net income ratio is 1.08, indicating a slight decrease in cash flow efficiency compared to net income. Overall, cash flow metrics are positive but show room for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.68B	26.00B	25.52B	22.31B	8.03B	11.69B
Gross Profit	16.77B	19.61B	18.84B	20.76B	18.52B	11.69B
EBITDA	13.06B	11.72B	10.62B	11.29B	8.88B	4.90B
Net Income	7.28B	5.94B	5.07B	7.18B	5.86B	3.30B
Balance Sheet
Total Assets	422.73B	479.84B	493.18B	551.77B	667.27B	549.01B
Cash, Cash Equivalents and Short-Term Investments	105.75B	124.70B	149.25B	188.03B	453.03B	377.75B
Total Debt	28.27B	45.13B	59.08B	37.88B	23.77B	13.63B
Total Liabilities	373.23B	431.47B	452.22B	515.16B	611.01B	492.95B
Stockholders Equity	49.50B	48.38B	40.96B	36.61B	56.26B	56.06B
Cash Flow
Free Cash Flow	7.89B	2.05B	18.89B	1.09B	1.20B	6.22B
Operating Cash Flow	8.27B	2.67B	19.59B	2.06B	2.12B	6.85B
Investing Cash Flow	16.25B	35.43B	57.41B	32.05B	-75.66B	-125.85B
Financing Cash Flow	-6.12B	-47.06B	-61.24B	-68.72B	96.32B	143.98B

Charles Schwab Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 96.44
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCHW, the sentiment is Positive. The current price of 96.44 is above the 20-day moving average (MA) of 95.17, above the 50-day MA of 91.54, and above the 200-day MA of 81.33, indicating a bullish trend. The MACD of 1.78 indicates Positive momentum. The RSI at 58.73 is Neutral, neither overbought nor oversold. The STOCH value of 37.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SCHW.

Charles Schwab Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBKR	80 Outperform	$28.12B	33.37	19.15%	1.39%	12.25%	20.76%
RJF	78 Outperform	$33.62B	16.35	18.22%	1.20%	9.01%	14.86%
MS	77 Outperform	$224.22B	16.02	14.13%	2.69%	6.31%	45.50%
SCHW	74 Outperform	$175.23B	25.96	15.59%	1.09%	4.64%	54.26%
LPLA	74 Outperform	$29.92B	25.58	29.46%	0.32%	29.23%	13.45%
GS	71 Outperform	$218.23B	15.88	12.78%	1.69%	3.53%	45.85%
Sector *	58 Neutral	HK$95.83B	5.46	-3.98%	4.95%	3.41%	-44.65%

Charles Schwab Corporate Events

Charles Schwab Elects Directors at Annual Meeting

On May 22, 2025, Charles Schwab Corporation held its Annual Meeting of Stockholders where all director nominees were elected with more ‘for’ votes than ‘against’ votes. The meeting also saw the approval of Deloitte & Touche LLP as independent auditors for the 2025 fiscal year, the advisory vote on executive compensation, and a stockholder proposal for board declassification to elect directors annually.

The most recent analyst rating on (SCHW) stock is a Buy with a $82.00 price target. To see the full list of analyst forecasts on Charles Schwab stock, see the SCHW Stock Forecast page.