Charles Schwab (SCHW) AI Stock Analysis

• Market Cap: $168.43B
• Dividend Yield: 1.18%
• Average Volume (3M): 7.07M
• Price to Earnings (P/E): 28.2
• Beta (1Y): 1.12
• Revenue Growth: 2.32%
• EPS Growth: 37.66%
• Country: US
• Employees: 32,100
• Sector: Financial
• Sector Strength: 73
• Industry: Financial - Capital Markets
• EPS (TTM): 1.04
• Shares Outstanding: 1,816,970,300
• 10 Day Avg. Volume: 6,028,987
• 30 Day Avg. Volume: 7,072,849
• PEG Ratio: 2.57
• Price to Book (P/B): 3.37
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 17.05
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 1.84
• Enterprise Value/Gross Profit: 8.45
• Enterprise Value/Ebitda: 4.97
• 1Y Price Target: $98.53
• Price Target Upside: 7.97% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 20

• Rating: 78 Outperform
• Price Target: $101.00 ▲(10.67%Upside)

Charles Schwab scores highly due to its strong earnings call performance and positive technical indicators. Despite challenges like high valuation and inconsistent revenue growth, the company's strategic initiatives and financial stability contribute to a strong overall outlook. The absence of any significant corporate events allows focus on these core strengths.

Positive Factors

Client Asset Growth

SCHW reported a 4.6% increase in total client assets to $10.3 trillion, with net new asset inflows of $33.6 billion and 4.3% market appreciation.

Earnings Performance

The company posted a 1Q25 EPS of USD1.04, surpassing the consensus estimate with outperformance stemming from exceptional net new assets and strong trading activity.

Strategic Acquisition

The acquisition of TD Ameritrade not only brought scale but also best-in-class trading capabilities to the platform, further consolidating its leading position.

Negative Factors

Cash and Funding

Total client cash fell $8.6B sequentially and as a % of client assets was 10.5%, just below 10.6% at the end March.

Net Asset Growth

Net new asset growth and margin fall behind expectations on a run-rate basis, tracking below Morgan Stanley's estimates and consensus expectations.

New Account Growth

There is a deceleration in new account growth and a 14% decrease in total trades, along with a modest 1% decline in cash sweep balance due to seasonality.

Charles Schwab Business Overview & Revenue Model

Company Description

Charles Schwab Corporation is a leading American financial services company headquartered in Westlake, Texas. It operates in the financial services sector, offering a wide range of services including brokerage, wealth management, banking, asset management, and financial advisory services. The company caters to individual investors, independent investment advisors, and employers, providing innovative solutions and technology-driven platforms to meet their financial needs.

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's financial statements reflect a solid performance with strong profitability margins and efficient cash flow management, despite recent revenue declines. The company maintains a low leverage balance sheet, which provides financial flexibility. However, the decreasing trend in total assets and inconsistent revenue growth present challenges that need addressing to sustain long-term growth.

Income Statement

The income statement shows a stable revenue base with total revenue at $17.57B TTM, although it reflects a decline from the previous year. The gross profit margin is robust at 89%, and net profit margin is a healthy 36.9% TTM. However, revenue growth has been inconsistent, with a notable decline in the most recent period. EBIT and EBITDA margins are 33.8% and 45.9% respectively, indicating strong operational efficiency despite revenue declines.

Balance Sheet

The balance sheet indicates strong equity with a debt-to-equity ratio of 0.11 TTM, reflecting low leverage. Return on equity is high at 24.8% TTM, showcasing effective usage of equity. The equity ratio of 71.3% TTM suggests a healthy proportion of equity financing, though total assets have decreased significantly. Overall, the balance sheet shows financial stability with ample equity, albeit with reduced asset levels.

Cash Flow

Cash flow metrics are strong with an operating cash flow to net income ratio of 0.62 TTM, indicating healthy cash generation relative to profits. Free cash flow has grown significantly, contributing to a positive free cash flow to net income ratio of 0.54 TTM. This suggests effective cash management and capacity for reinvestment or debt reduction. Despite fluctuations in cash flows due to large investing and financing activities, free cash flow remains robust.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	26.00B	25.52B	22.31B	8.03B	11.69B
Gross Profit	19.61B	18.84B	20.76B	18.52B	11.69B
EBITDA	9.13B	7.72B	10.64B	8.88B	4.90B
Net Income	5.94B	5.07B	7.18B	5.86B	3.30B
Balance Sheet
Total Assets	479.84B	493.18B	551.77B	667.27B	549.01B
Cash, Cash Equivalents and Short-Term Investments	124.70B	149.25B	188.07B	453.03B	377.75B
Total Debt	45.13B	59.08B	37.88B	23.77B	13.63B
Total Liabilities	431.47B	452.22B	515.16B	611.01B	492.95B
Stockholders Equity	48.38B	40.96B	36.61B	56.26B	56.06B
Cash Flow
Free Cash Flow	2.05B	18.89B	1.09B	1.20B	6.22B
Operating Cash Flow	2.67B	19.59B	2.06B	2.12B	6.85B
Investing Cash Flow	35.43B	57.41B	32.05B	-75.66B	-125.85B
Financing Cash Flow	-47.06B	-61.24B	-68.72B	96.32B	143.98B

Charles Schwab Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 91.26
• 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 91.26 is above the 20-day moving average (MA) of 90.88, above the 50-day MA of 88.67, and above the 200-day MA of 79.12, indicating a bullish trend. The MACD of 1.18 indicates Positive momentum. The RSI at 55.78 is Neutral, neither overbought nor oversold. The STOCH value of 49.25 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
LPLA	80 Outperform	$29.63B	25.64	40.36%	0.33%	26.32%	8.63%
IBKR	79 Outperform	$25.99B	32.92	19.26%	0.54%	14.67%	23.60%
SCHW	78 Outperform	$168.43B	28.18	14.12%	1.18%	2.32%	37.66%
RJF	77 Outperform	$31.53B	15.06	18.84%	1.28%	11.78%	25.68%
MS	76 Outperform	$227.16B	16.04	14.13%	2.61%	6.31%	45.50%
GS	71 Outperform	$215.56B	16.30	12.78%	1.71%	-0.34%	45.85%
Sector *	64 Neutral	$6.53B	11.09	7.19%	5.09%	23.85%	5.18%

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.