Charles Schwab (SCHW) AI Stock Analysis

• Market Cap: $184.59B
• Dividend Yield: 1.07%
• Average Volume (3M): 7.69M
• Price to Earnings (P/E): 22.3
• Beta (1Y): 0.95
• Revenue Growth: 5.90%
• EPS Growth: 66.60%
• Country: US
• Employees: 32,100
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 1.39
• Shares Outstanding: 1,776,936,800
• 10 Day Avg. Volume: 10,849,712
• 30 Day Avg. Volume: 7,689,152
• 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: 1.00
• Enterprise Value/Revenue: 6.90
• Enterprise Value/Gross Profit: 7.74
• Enterprise Value/Ebitda: 14.44
• 1Y Price Target: $122.54
• Price Target Upside: 17.96% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 5.87
• Revenue Forecast (FY): $26.45B

• Rating: 77 Outperform
• Price Target: $117.00 ▲(12.63% Upside)

The score is driven by strong profitability and a positive earnings outlook (record results and continued expansion guidance), supported by constructive technical trends. It is tempered by weaker cash flow metrics (negative operating and free cash flow) and a valuation that is not especially cheap given a modest dividend yield.

Positive Factors

Scale of Client Assets & Accounts

A record $11.9 trillion in client assets and 46.5 million accounts create durable revenue streams from asset-based fees and deposit funding. Scale strengthens cross-sell, lowers unit costs, and provides a competitive moat that supports long-term client retention and product expansion.

High Profitability & Margins

Very strong operating and net margins reflect a capital-efficient, tech-enabled brokerage model with high recurring fee capture. Sustainable margins provide free cash to invest in digital platforms and client experience, enabling durable competitive advantage and resilience through cycles.

Strategic Expansion into Private Markets

Acquiring Forge expands Schwab’s product moat into private markets, unlocking new fee pools and differentiation vs. pure brokerages. Integrating private market liquidity and distribution leverages Schwab’s scale for long-term fee diversification and deeper client engagement.

Negative Factors

Weak Operating Cash Flow

Persistent negative operating and free cash flow in the trailing period signals structural cash generation weakness, forcing reliance on financing or asset sales. Over months this can constrain reinvestment, capital returns, and reduce flexibility to weather revenue volatility.

Interest Rate / NIM Sensitivity

Schwab’s business depends materially on net interest margin and interest-earning assets. Modest asset growth guidance and NIM exposure mean rate declines or margin compression would materially reduce core net interest revenue, hurting long-term revenue stability and earnings predictability.

Reliance on Debt Financing

A moderate but meaningful debt-to-equity ratio and issuance of senior notes increase fixed obligations. Higher leverage reduces financial flexibility, raises refinancing risk in stress periods, and can magnify earnings pressure if revenue or margins deteriorate over the medium term.

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 generates revenue through several key streams. Its primary source of income comes from net interest revenue, which is derived from the interest earned on cash balances held by clients and loans provided to them. The company also earns commissions and fees from executing trades for clients, though it has eliminated commissions on stock and ETF trades, shifting its focus to other revenue sources. Additionally, Schwab generates income through asset management fees from its investment advisory services and mutual funds. The firm has established partnerships with various financial institutions and technology providers to enhance its service offerings, further contributing to its earnings through enhanced client engagement and retention.

Charles Schwab Financial Statement Overview

Summary

Strong profitability (net margin 28.04%; EBIT/EBITDA margins 36.04%/40.32%) and solid ROE (17.54%) support the score, but it is held back by negative operating and free cash flow in the TTM period and slower recent revenue growth.

Income Statement

Charles Schwab has demonstrated strong revenue growth with a 1.83% increase in TTM. The company maintains robust profitability with a gross profit margin of 78.03% and a net profit margin of 28.04%. EBIT and EBITDA margins are also healthy at 36.04% and 40.32%, respectively. However, the revenue growth rate has slowed compared to previous years, indicating potential challenges in sustaining high growth.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 0.69, indicating a balanced approach to leveraging. Return on equity is strong at 17.54%, reflecting efficient use of equity capital. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing, which could pose risks if market conditions change.

Cash Flow

Cash flow analysis reveals challenges, with negative operating cash flow and free cash flow in the TTM period. The free cash flow growth rate is significantly negative, indicating potential liquidity issues. Despite this, the free cash flow to net income ratio is strong at 1.39, suggesting that the company is still generating cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	26.84B	26.00B	25.52B	22.31B	19.00B	12.11B
Gross Profit	23.92B	19.61B	18.84B	20.76B	18.52B	11.69B
EBITDA	12.82B	9.13B	7.72B	10.64B	8.88B	4.90B
Net Income	8.85B	5.94B	5.07B	7.18B	5.86B	3.30B
Balance Sheet
Total Assets	3.80B	479.84B	493.18B	551.77B	667.27B	549.01B
Cash, Cash Equivalents and Short-Term Investments	632.00M	124.70B	149.25B	188.03B	453.03B	377.75B
Total Debt	279.00M	45.13B	59.08B	37.88B	23.77B	13.63B
Total Liabilities	765.00M	431.47B	452.22B	515.16B	611.01B	492.95B
Stockholders Equity	3.04B	48.38B	40.96B	36.61B	56.26B	56.06B
Cash Flow
Free Cash Flow	9.68B	2.05B	18.89B	1.09B	1.20B	6.22B
Operating Cash Flow	10.07B	2.67B	19.59B	2.06B	2.12B	6.85B
Investing Cash Flow	25.69B	35.43B	57.41B	32.05B	-75.66B	-125.85B
Financing Cash Flow	-46.41B	-47.06B	-61.24B	-68.72B	96.32B	143.98B

Charles Schwab Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 103.88
• 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 103.88 is above the 20-day moving average (MA) of 102.72, above the 50-day MA of 99.14, and above the 200-day MA of 93.34, indicating a bullish trend. The MACD of 1.25 indicates Positive momentum. The RSI at 57.21 is Neutral, neither overbought nor oversold. The STOCH value of 67.65 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	78 Outperform	$32.71B	33.75	20.41%	0.46%	11.88%	28.96%
RJF	78 Outperform	$33.55B	16.17	17.16%	1.26%	6.45%	5.85%
GS	78 Outperform	$273.92B	18.30	13.91%	1.55%	2.31%	44.49%
SCHW	77 Outperform	$184.59B	22.31	18.11%	1.07%	5.90%	66.60%
MS	76 Outperform	$286.20B	17.91	16.34%	2.14%	7.22%	48.18%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
LPLA	63 Neutral	$31.13B	35.43	20.86%	0.32%	35.19%	-18.62%

Charles Schwab Corporate Events

Charles Schwab Announces Key Executive and Organizational Changes

On January 29, 2026, Charles Schwab announced a series of executive transitions and organizational changes, highlighted by the immediate appointment of Dennis Howard as Managing Director, Chief Technology, Operations and Data Officer, expanding his remit beyond his prior CIO role to oversee a newly formed Technology, Operations, and Data organization. Effective July 1, 2026, the firm will see the retirement of Charles Schwab Bank CEO Paul Woolway, to be succeeded by Tyler Woulfe as President and CEO of the bank, and the retirement of General Auditor Mitch Mantua, with Jessica Bramhall stepping in as General Auditor, while Neesha Hathi will lead a newly created Wealth Advisory and Banking Services organization that brings Charles Schwab Bank under her purview; together, these moves consolidate technology, operations, data, wealth advisory, and banking leadership in a way that is designed to deepen Schwab’s relationships with investors and advisors and reinforce the firm’s operational and governance structure as long-tenured executives depart.

The most recent analyst rating on (SCHW) stock is a Buy with a $126.00 price target. To see the full list of analyst forecasts on Charles Schwab stock, see the SCHW Stock Forecast page.

Charles Schwab Issues $2 Billion Senior Notes

On November 14, 2025, Charles Schwab Corporation issued $2 billion in Fixed-to-Floating Rate Senior Notes, with maturities in 2031 and 2036, raising approximately $1.986 billion after expenses. This strategic financial move is expected to bolster the company’s capital structure and enhance its market position by leveraging favorable interest rates and strong investor demand.

The most recent analyst rating on (SCHW) stock is a Buy with a $115.00 price target. To see the full list of analyst forecasts on Charles Schwab stock, see the SCHW Stock Forecast page.

Charles Schwab to Acquire Forge Global Holdings

On November 6, 2025, Charles Schwab announced its agreement to acquire Forge Global Holdings for approximately $660 million, aiming to enhance access to private markets for investors. This acquisition is expected to deepen liquidity and transparency, leveraging Schwab’s extensive client base and Forge’s expertise in private market platforms. The transaction, anticipated to close in the first half of 2026, will integrate Forge’s capabilities with Schwab’s existing services, potentially transforming private market access and offering new growth opportunities for private companies and investors.

The most recent analyst rating on (SCHW) stock is a Buy with a $134.00 price target. To see the full list of analyst forecasts on Charles Schwab stock, see the SCHW Stock Forecast page.