Charles Schwab (SCHW) AI Stock Analysis

• Market Cap: $166.81B
• Dividend Yield: 1.07%
• Average Volume (3M): 12.30M
• Price to Earnings (P/E): 20.5
• Beta (1Y): 1.00
• 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: 1,752,210,400
• 10 Day Avg. Volume: 10,612,431
• 30 Day Avg. Volume: 12,295,790
• PEG Ratio: 0.36
• Price to Book (P/B): 3.58
• Price to Sales (P/S): 6.40
• P/FCF Ratio: 20.20
• Enterprise Value/Market Cap: 1.23
• Enterprise Value/Revenue: 7.39
• Enterprise Value/Gross Profit: 8.72
• Enterprise Value/Ebitda: 15.32
• 1Y Price Target: $122.58
• Price Target Upside: 28.76% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 5.87
• Revenue Forecast (FY): $26.46B

• Rating: 69 Neutral
• Price Target: $104.00 ▲(9.24% Upside)
• Action: Downgraded Date: 03/02/26
• Date: Action: Downgraded 03/02/26

The score is driven primarily by solid financial performance (strong profitability and a much improved 2025 balance sheet) but is held back by volatility in results. Technical signals are currently bearish and weigh on near-term outlook, while valuation looks reasonable and recent corporate events are modestly positive.

Positive Factors

High profitability

Sustained high net margins (~32% in 2025) and stronger operating profitability indicate Schwab generates durable earnings per unit of revenue. Higher margins provide cash to reinvest in technology, pay dividends, and absorb competitive price pressure, supporting long-term return on equity and capital allocation.

Strengthened balance sheet

Material reduction in leverage and a sizable equity base (~$49.4B) greatly reduce financial risk and increase flexibility. Low debt affords capacity for buybacks, dividends, acquisitions, and defensive liquidity during stress, which is a durable structural advantage for a capital-markets firm.

Robust cash generation

Strong free cash flow that closely tracks net income demonstrates earnings quality and funds sustained capital returns and investment. Reliable FCF supports dividend increases and tech/ops spending, enabling long-term client service improvements and strategic investments despite year-to-year lumpiness.

Negative Factors

Volatile results

Meaningful year-to-year swings in revenue, earnings, debt and cash flow reduce predictability. This lumpiness complicates multi-period planning, increases forecasting risk for capital allocation, and makes sustained execution harder, exposing investors to cyclical swings in performance.

Interest-rate sensitivity

A meaningful portion of Schwab’s revenue derives from net interest and margin-related activities, making earnings sensitive to the rate environment. Structural exposure to rates can cause persistent swings in net interest revenue and margins, reducing through-cycle earnings stability.

Leadership transition risk

Recent retirements and a reorganization that consolidates banking, wealth advisory, tech and operations create near-term execution risk. While designed to deepen client relationships, leadership turnover and structural changes can disrupt strategy delivery and prolong realization of expected efficiencies.

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 and a notably strengthened 2025 balance sheet (very low debt, healthy ROE) support the score. The key offset is material year-to-year volatility in revenue growth, leverage, and cash flow, reducing predictability.

Income Statement

Revenue has expanded meaningfully over the period (from $12.1B in 2020 to $27.7B in 2025), with 2025 showing a sharp re-acceleration versus the relatively flat growth in 2024. Profitability is a clear strength: 2025 net margin is strong (~32%) and operating profitability improved substantially versus 2023–2024 (higher operating and EBITDA margins). The main weakness is volatility in growth and earnings across years (not a steady climb), which raises cyclicality/interest-rate sensitivity concerns for forward results.

Balance Sheet

Balance sheet leverage improved dramatically by 2025, with debt dropping to ~$0.3B and debt-to-equity near zero, which materially reduces financial risk compared with 2022–2024 when leverage was much higher. Equity is sizable (~$49.4B in 2025) and returns on equity are healthy (~18% in 2025). The key concern is the large year-to-year swing in debt levels (very high in 2023–2024 versus minimal in 2025), which suggests balance sheet structure and funding mix can change materially over time.

Cash Flow

Cash generation is strong in 2025 with operating cash flow of ~$9.3B and free cash flow of ~$8.8B, with free cash flow closely matching reported earnings (about 94% of net income), supporting earnings quality. However, cash flow has been highly uneven across years (e.g., very high in 2023, very low in 2021–2022, then strong again in 2025), and the reported free cash flow growth rate is extremely volatile (including a very large decline in 2025), indicating lumpiness and lower predictability.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	27.68B	26.00B	25.52B	22.31B	19.00B
Gross Profit	22.22B	19.61B	18.84B	20.76B	18.52B
EBITDA	15.04B	9.13B	7.72B	10.64B	8.88B
Net Income	8.85B	5.94B	5.07B	7.18B	5.86B
Balance Sheet
Total Assets	491.00B	479.84B	493.18B	551.77B	667.27B
Cash, Cash Equivalents and Short-Term Investments	632.00M	124.70B	149.25B	188.03B	453.03B
Total Debt	31.86B	45.13B	59.08B	37.88B	23.77B
Total Liabilities	765.00M	431.47B	452.22B	515.16B	611.01B
Stockholders Equity	49.40B	48.38B	40.96B	36.61B	56.26B
Cash Flow
Free Cash Flow	8.76B	2.05B	18.89B	1.09B	1.20B
Operating Cash Flow	9.31B	2.67B	19.59B	2.06B	2.12B
Investing Cash Flow	24.54B	35.43B	57.41B	32.05B	-75.66B
Financing Cash Flow	-29.70B	-47.06B	-61.24B	-68.72B	96.32B

Charles Schwab Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 95.20
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 95.2 is below the 20-day moving average (MA) of 98.07, below the 50-day MA of 99.89, and above the 200-day MA of 94.33, indicating a neutral trend. The MACD of -1.71 indicates Positive momentum. The RSI at 44.13 is Neutral, neither overbought nor oversold. The STOCH value of 79.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SCHW.

Charles Schwab Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBKR	75 Outperform	$31.71B	32.11	20.41%	0.46%	11.88%	28.96%
RJF	71 Outperform	$30.17B	14.99	17.11%	1.26%	6.45%	5.85%
SCHW	69 Neutral	$166.81B	20.46	18.10%	1.07%	5.90%	66.60%
MS	69 Neutral	$264.39B	16.31	15.60%	2.14%	7.22%	48.18%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
GS	64 Neutral	$255.08B	16.75	13.91%	1.55%	2.31%	44.49%
LPLA	60 Neutral	$24.05B	27.52	20.86%	0.32%	35.19%	-18.62%

Charles Schwab Corporate Events

Charles Schwab Completes Forge Global Acquisition to Expand Alternatives

On March 2, 2026, Charles Schwab completed its acquisition of Forge Global Holdings, Inc., a platform that provides eligible investors with access to pre-IPO company shares via direct private share purchases and specialized funds. The all-cash deal, under which Forge shareholders received $45 per common share and which was unanimously approved by both companies’ boards, brings together Schwab’s public markets strength with Forge’s private markets expertise to broaden alternative investment options for individuals and RIAs.

Schwab said integration work has begun and Forge will continue operating its business while maintaining existing issuer relationships, with Schwab planning to roll out Forge’s products to more investors over time. The move is aimed at expanding access, value, and transparency in private markets, signaling Schwab’s push to round out its alternatives offering and deepen its position as a one-stop platform spanning both public and private market investing.

The most recent analyst rating on (SCHW) stock is a Hold with a $103.00 price target. To see the full list of analyst forecasts on Charles Schwab stock, see the SCHW Stock Forecast page.

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.