Charles Schwab (SCHW)
Financials · $161B market cap · SEC CIK 0000316709
ahead of 85% of the S&P 500 · #15 of 76 in Financials
Next reports on Jan 19, 2027, before the open, with analysts expecting $1.75 in earnings per share.
52-week range $83.96 to $114.53. 19% below its 52-week high and 11% above its low.
The case for SCHW
- Cheap for its growth: 15.1× earnings, where 10%+ a year of growth plus a 1.8% dividend would justify about 26×.
- 35% of revenue drops through to net profit.
- Revenue growing 12.3% year over year.
- Earnings per share up 34.6%.
- Has compounded revenue at 18.0% a year over five years.
- Return on equity of 20%.
The case against
- The price trend is weak (32/100): −2.6% over a year, −14.1% over three months, 19% below its 52-week high.
- Weakest against its peers: price/sales of 5.3× is higher than 80% of Financials companies.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Financials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 49 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 83 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 89 |
| Momentumhow the price has behaved lately | 32 |
| Stabilityhow violently it moves, what it owes and what it pays you | 72 |
- Its debt and cash flow are not scored, as for every company in the Financials sector: for banks, insurers and brokers, borrowing is the business.
- Each factor except momentum is half fixed thresholds, half rank among the 76 Financials companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +12.3% |
|---|---|
| Over 5 years | +18.0% a year |
| FY2025 revenue | $23.9B (+22%) |
Free cash flow
Is it generating real cash? Not meaningful for a financial company
Profit margins
Is profitability improving? Yes, improving
| Gross margin | 89% |
|---|---|
| Operating margin | 45% |
| Net margin, FY24 → FY25 → now | 30.3% → 37.0% → 34.9% |
Debt vs. cash
Is the balance sheet healthy? Not judged for a financial company
| Cash | $46.0B |
|---|---|
| Long-term debt | $22.2B |
| Net cash | $23.8B |
Valuation
Is the stock price reasonable? Mixed: cheap on earnings, dear on book value
| P/E | 15.1× |
|---|---|
| Fair P/E for its growth | 26× |
| Price / book | 3.20× |
| Fair P/B for its ROE | 2.0× |
| Forward P/E | 11.6× |
| EV / EBITDA | 28.3× |
At 15.1× earnings it trades well below the 26× that 10%+ a year of growth plus a 1.8% dividend would justify. At 3.20× book it trades above the 2.0× that its 20% return on equity would justify; for a financial company that counts for more than earnings.
The financials, five years deep
Pulled from Charles Schwab's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $23.9B | $19.6B | $18.8B | $20.8B | $18.5B |
| Change on the year | +22% | +4% | −9% | +12% | — |
| Free cash flow | |||||
| Free cash flow | $8.7B | $2.0B | $18.8B | $1.1B | $1.1B |
| Of revenue | 36% | 10% | 100% | 5% | 6% |
| Profit margins | |||||
| Net margin | 37.0% | 30.3% | 26.9% | 34.6% | 31.6% |
| Debt vs. cash | |||||
| Cash | $46.0B | $42.1B | $43.3B | $40.2B | $63.0B |
| Long-term debt | $22.2B | $22.4B | $26.1B | $20.8B | $18.9B |
| Net cash (debt) | $23.8B | $19.7B | $17.2B | $19.4B | $44.1B |
What Charles Schwab says it does
Corporate Overview The Charles Schwab Corporation (CSC) is a savings and loan holding company. CSC engages, through its subsidiaries (collectively referred to as Schwab or the Company), in wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. At December 31, 2025, Schwab had $11.90 trillion in client assets, 38.5 million active brokerage accounts, 5.7 million workplace plan participant accounts, and 2.2 million banking accounts. Principal business subsidiaries of CSC include the following: • Charles Schwab & Co., Inc. (CS&Co), incorporated in 1971, a securities broker-dealer; • Charles Schwab Bank, SSB (CSB), our principal banking entity; and • Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab’s proprietary mutual funds (Schwab Funds ® ) and for Schwab’s exchange-traded funds (Schwab ETFs). Unless otherwise indicated, the terms “Schwab,” “the…
Risk factors SCHW lists in its 10-K
- Developments in the business, economic, and geopolitical environment could negatively impact our business
- A significant change in client cash allocations could negatively impact our income
- Significant interest rate changes could affect our profitability
- A significant decrease in our liquidity could negatively affect our business as well as reduce client confidence in us
- Security breaches of our systems, or those of our clients or third parties, may subject us to significant liability and damage our reputation
- Technology and operational failures or errors and other operational risks could subject us to losses, litigation, regulatory actions, and reputational damage
- Our investment management operations may subject us to fiduciary or other legal liability for client losses
- We may suffer financial loss from fraud and financial crime
- We may suffer significant losses from our credit exposures
- Extensive regulatory supervision of our businesses may subject us to significant penalties
- or limitations on business activities
- Legislation or changes in rules and regulations could negatively affect our business and financial results
- Failure to meet capital adequacy and liquidity guidelines could affect our financial condition
- We are subject to litigation and regulatory investigations and proceedings and may not be successful in defending against claims or proceedings
- Potential strategic transactions could have a negative impact on our financial position
- We intend to offer clients direct access to select digital assets, which exposes us to new and uncertain financial, operational, legal, and regulatory risks that could adversely affect our business and financial results
- Our industry is highly competitive and characterized by aggressive price competition
- Our stock price has fluctuated historically, and may continue to fluctuate