Charles Schwab (SCHW) AI Stock Analysis

• Market Cap: $160.38B
• Dividend Yield: 1.22%
• Average Volume (3M): 6.97M
• Price to Earnings (P/E): 26.8
• Beta (1Y): 1.14
• Revenue Growth: 2.32%
• EPS Growth: 37.66%
• Country: US
• Employees: 32,100
• Sector: Financial
• Sector Strength: 79
• Industry: Financial - Capital Markets
• EPS (TTM): 1.04
• Shares Outstanding: 1,816,970,300
• 10 Day Avg. Volume: 6,469,426
• 30 Day Avg. Volume: 6,967,950
• PEG Ratio: 0.81
• Price to Book (P/B): 2.82
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 132.03
• Enterprise Value/Market Cap: 0.25
• Enterprise Value/Revenue: 0.41
• Enterprise Value/Gross Profit: 1.98
• Enterprise Value/Ebitda: 1.17
• 1Y Price Target: $92.35
• Price Target Upside: 4.47% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 21

• Rating: 78 Outperform
• Price Target: $101.00 ▲(14.25%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

Earnings

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.

Growth Initiatives

Expect AI initiatives to solidify its leading position and support its long-term organic growth target and operational efficiency.

Negative Factors

Cash Flow

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

Stock Performance

Expect stock to be a modest underperformer today.

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'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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
26.20B	26.00B	18.84B	20.76B	18.52B	11.69B
	Gross Profit
20.41B	19.61B	18.84B	20.76B	18.52B	11.69B
	EBIT
8.35B	7.69B	6.38B	9.39B	7.71B	4.30B
	EBITDA
9.77B	9.13B	7.72B	10.64B	8.88B	4.90B
	Net Income Common Stockholders
6.49B	5.94B	5.07B	7.18B	5.86B	3.30B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
90.77B	124.70B	149.25B	188.07B	453.03B	377.75B
	Total Assets
294.00B	479.84B	493.18B	551.77B	667.27B	549.01B
	Total Debt
7.43B	45.13B	59.08B	37.88B	23.77B	13.63B
	Net Debt
-21.91B	3.05B	15.74B	-2.32B	-39.21B	-26.72B
	Total Liabilities
272.26B	431.47B	452.22B	515.16B	611.01B	492.95B
	Stockholders Equity
21.75B	48.38B	40.96B	36.61B	56.26B	56.06B
Cash Flow		Free Cash Flow
9.79B	2.05B	18.89B	1.09B	1.20B	6.22B
	Operating Cash Flow
10.38B	2.67B	19.59B	2.06B	2.12B	6.85B
	Investing Cash Flow
36.43B	35.43B	57.41B	32.05B	-75.66B	-125.85B
	Financing Cash Flow
-42.50B	-47.06B	-61.24B	-68.72B	96.32B	143.98B

Charles Schwab Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 88.40
• 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 88.4 is above the 20-day moving average (MA) of 88.07, above the 50-day MA of 82.27, and above the 200-day MA of 75.99, indicating a bullish trend. The MACD of 1.42 indicates Positive momentum. The RSI at 64.38 is Neutral, neither overbought nor oversold. The STOCH value of 71.46 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	81 Outperform	$86.65B	28.30	19.26%	0.62%	14.67%	23.59%
LPLA	80 Outperform	$30.33B	26.25	40.36%	0.32%	26.32%	8.63%
SCHW	78 Outperform	$160.38B	26.83	14.12%	1.22%	2.32%	37.66%
RJF	77 Outperform	$29.63B	14.15	18.84%	1.29%	11.78%	25.68%
GS	72 Outperform	$188.67B	14.27	12.26%	1.95%	7.70%	68.64%
MS	71 Outperform	$211.48B	15.47	13.88%	2.81%	6.53%	55.54%
Sector *	64 Neutral	$12.85B	9.81	7.79%	78.20%	12.23%	-7.93%

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.