SCHW
SCHWAB CHARLES CORPNYSEValuation snapshot
Near base casePrice is close to the base-case intrinsic value.
Price as of Sep 4, 2026 · Valuation Sep 6, 2026
What drives SCHW's base case?
base-case thesisRevenue growth in the first half of 2026 was broad, with lending, asset-based fees, and trading all contributing. The base case assumes activity normalizes but Schwab keeps gathering client assets and deepening relationships. Its large platform offsets most growth spending, keeping profit near the strong level recently reported.
What shapes the assumptions
First-half revenue growth matches management's updated annual outlook
Year-over-year net revenue growth
Raises revenue growth
Core net new assets continue near the firm's stated organic-growth goal
Core net new client assets
Raises revenue growth
Recent profit improvement demonstrates platform scale
Pre-tax profit margin
Raises operating margin
Ongoing product, technology, and lending expansion requires retained capital
Growth investment and balance-sheet assets
Raises reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 9.7% a year. Over the last 5 years it grew 10.4% a year, so the price assumes about what it has delivered.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 50.8% operating margin, against the 52.0% assumed here.
- How confident is this estimate?
- Robustness 57.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. Total client assets, year-end
Assets held for clients drive asset-management fees, trading opportunities, lending demand, and the potential pool of client cash.
$12T
reported2. Core net new client assets, annual
This measures client money won through organic activity and is a cleaner indicator of franchise growth than market appreciation.
$519B
reported3. Pre-tax profit margin, annual
This shows how efficiently Schwab converts net revenue into profit before taxes and is the closest reported proxy for the model's operating profitability.
47.9%
reported5. Active brokerage accounts, year-end
Active accounts measure the size of Schwab's engaged customer base and its opportunity to earn trading, advice, asset-management, lending, and banking revenue.
38,506,000
reportedBase inputs from financials
source period →Base revenue (TTM)
$26B
Diluted shares
1,739,000,000
Net cash
—
Bear
low confidence$71.54
IV / share
-35.2% vs $110.38
- Explicit cash flows
- $17.16
- Terminal value
- $54.38
- Net cash
- $0.00
- Intrinsic value / share
- $71.54
76.0% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth15.0% → 7.0% → 5.0% → 4.0% → 3.5%medium
How derived: First-half 2026 revenue rose 0.18 and second-quarter revenue rose 0.21, but this case assumes weaker markets, moderating trading, and renewed cash sorting cause growth to fall below management's 2026 outlook and then approach mature-industry levels.
Why this confidence: Two reported 2026 quarters establish the near-term starting point ↑, Trading, markets, interest rates, and client cash behavior are volatile ↓
Measured by
- Total client assets, year-end$12Treported
- Core net new client assets, annual$519Breported
- Client cash as a share of client assets, year-end9.7%reported
- Active brokerage accounts, year-end38,506,000reported
Evidence for
- Schwab's initial 2026 scenario anticipated revenue growth of only 0.095 to 0.105, demonstrating how sensitive the outlook is to market, rate, and client-activity assumptions.[Schwab 2026 Winter Business Update]· primary
Evidence against
- Second-quarter 2026 revenue grew 0.21, while client assets grew 0.22 and core net new assets grew 0.49 from the prior-year quarter.[Schwab Q2 2026 results]· primary
Operating margin46.0%medium
How derived: Using Schwab's pre-tax profit margin as the closest reported operating-profit measure, this case discounts the 0.519 second-quarter 2026 result for lower activity, continuing investment, and adverse funding mix.
Why this confidence: Recent reported profitability provides a clear reference point ↑, Revenue mix and market activity can change profitability quickly ↓
Measured by
- Total client assets, year-end$12Treported
- Pre-tax profit margin, annual47.9%reported
- Client cash as a share of client assets, year-end9.7%reported
Evidence for
- Schwab reported that second-quarter 2026 expenses increased 0.12 year over year, including acquisition and integration costs.[Schwab Q2 2026 results]· primary
Evidence against
- The reported pre-tax profit margin improved from 0.479 in second-quarter 2025 to 0.519 in second-quarter 2026.[Schwab Q2 2026 results]· primary
Tax rate24.5%medium
How derived: The rate starts from the 0.228 effective tax rate reported in both 2024 and 2025 and adds a cushion for state taxes and less favorable tax-credit outcomes.
Why this confidence: Three years of audited effective-tax-rate disclosures ↑, Tax credits, reserves, and state apportionment can vary ↓
No tracked driver measures this assumption yet.
Evidence for
- State income taxes added 0.027 to Schwab's 2025 effective tax rate, and the filing identifies California and New York as the principal states.[Schwab 2025 Form 10-K tax note]· primary
Evidence against
- Schwab's effective tax rate was 0.228 in both 2024 and 2025, below this assumption.[Schwab 2025 Form 10-K tax note]· primary
Reinvestment rate35.0%low
How derived: This case assumes 0.35 of after-tax operating profit must be retained for technology, regulatory capital, balance-sheet growth, and acquisitions because Schwab is simultaneously expanding lending and investing in new services.
Why this confidence: Regulatory-capital and balance-sheet disclosures identify the uses of retained capital ↑, A single reinvestment ratio is an imperfect representation of a regulated financial company ↓
Measured by
- Core net new client assets, annual$519Breported
- Pre-tax profit margin, annual47.9%reported
Evidence for
- Receivables from brokerage clients increased 0.48 year over year by June 2026, while Schwab was also investing in wealth, trading, artificial-intelligence, digital-asset, and private-market capabilities.[Schwab Q2 2026 Form 10-Q]· primary
Evidence against
- Schwab repurchased 11.2 million common shares for $1.0 billion in second-quarter 2026, indicating that current internal funding needs do not consume all earnings.[Schwab Q2 2026 results]· primary
Terminal growth2.0%low
How derived: Although management targets high-single-digit to low-double-digit revenue growth before maturity, this case limits perpetual growth to 0.02 because brokerage revenue remains exposed to market levels, interest rates, and client cash allocation.
Why this confidence: The assumption is below the current long-term Treasury yield and management's medium-term framework ↑, Perpetual forecasts extend far beyond available company guidance ↓
Measured by
- Core net new client assets, annual$519Breported
- Active brokerage accounts, year-end38,506,000reported
Evidence for
- Schwab warns that clients moving cash to higher-yielding alternatives or away from the company can reduce revenue.[Schwab 2025 Form 10-K]· primary
Evidence against
- Management's long-term financial framework calls for high-single-digit to low-double-digit revenue growth before the company reaches a mature steady state.[Schwab 2026 Investor Day]· primary
Base
low confidence$112.95
IV / share
+2.3% vs $110.38
- Explicit cash flows
- $24.05
- Terminal value
- $88.90
- Net cash
- $0.00
- Intrinsic value / share
- $112.95
78.7% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth18.0% → 10.0% → 8.5% → 7.5% → 6.5%medium
How derived: The first year uses the midpoint of management's updated 0.175 to 0.185 2026 outlook, followed by a gradual transition toward the high-single-digit portion of Schwab's long-term framework.
Why this confidence: First-year assumption matches reported year-to-date growth and updated company guidance ↑, Later years depend on unpredictable markets and client engagement ↓
Measured by
- Total client assets, year-end$12Treported
- Core net new client assets, annual$519Breported
- Client cash as a share of client assets, year-end9.7%reported
- Active brokerage accounts, year-end38,506,000reported
Price implies: 9.7% vs our 10.1% — one of several sets that fit this price
Evidence for
- First-half 2026 net revenue grew 0.18, matching this case's first-year assumption, with growth across interest, asset-management, and trading revenue.[Schwab Q2 2026 results]· primary
Evidence against
- The initial January 2026 company scenario anticipated revenue growth of only 0.095 to 0.105 before stronger market and client activity caused management to revise its view.[Schwab 2026 Winter Business Update]· primary
Operating margin52.0%medium
How derived: Using pre-tax profit margin as the operating-profit proxy, the assumption holds near the reported 0.519 second-quarter 2026 level as scale offsets continued spending on growth and integration.
Why this confidence: Recent reported margin closely matches the assumption ↑, The five-year revenue mix may differ materially from the current quarter ↓
Measured by
- Total client assets, year-end$12Treported
- Pre-tax profit margin, annual47.9%reported
- Client cash as a share of client assets, year-end9.7%reported
Price implies: 50.8% vs our 52.0% — one of several sets that fit this price
Evidence for
- Schwab reported a 0.519 GAAP pre-tax profit margin in second-quarter 2026 and 0.506 for the first half.[Schwab Q2 2026 results]· primary
Evidence against
- Second-quarter 2026 expenses rose 0.12, and management continued funding growth initiatives and Forge integration.[Schwab Q2 2026 results]· primary
Tax rate23.5%high
How derived: The assumption adopts management's approximately 0.235 full-year 2026 tax-rate planning figure, modestly above the 0.228 rate reported in 2024 and 2025.
Why this confidence: Direct management guidance and stable recent audited rates ↑, Future tax credits and state-tax effects remain uncertain ↓
No tracked driver measures this assumption yet.
Evidence for
- Management's 2026 financial scenario explicitly used an approximately 0.235 full-year tax rate.[Schwab 2026 Winter Business Update]· primary
Evidence against
- The audited effective tax rate was 0.228 in both 2024 and 2025 and 0.206 in 2023.[Schwab 2025 Form 10-K tax note]· primary
Reinvestment rate27.0%low
How derived: The model retains 0.27 of after-tax operating profit to support roughly 0.05 organic asset gathering, lending growth, technology, and regulatory capital while recognizing Schwab's scalable platform and current capacity for buybacks.
Why this confidence: Company disclosures identify both growth investment and capital-return capacity ↑, Regulated financial-company reinvestment is not captured cleanly by one cash-flow ratio ↓
Measured by
- Core net new client assets, annual$519Breported
- Pre-tax profit margin, annual47.9%reported
Evidence for
- Schwab's strategy calls for continuing investment in branches, advisors, artificial intelligence, lending, wealth management, digital assets, and private markets.[Schwab 2026 Investor Day]· primary
Evidence against
- The company maintained an 0.087 preliminary Tier 1 leverage ratio and repurchased $1.0 billion of common shares in second-quarter 2026.[Schwab Q2 2026 results]· primary
Terminal growth2.5%low
How derived: The perpetual rate is set well below management's high-single-digit to low-double-digit medium-term revenue framework but allows modest real growth from continuing client and asset gathering.
Why this confidence: Long history of asset and account growth ↑, Small changes in a perpetual assumption materially affect value ↓
Measured by
- Core net new client assets, annual$519Breported
- Active brokerage accounts, year-end38,506,000reported
Evidence for
- Core net new client assets increased from $305.7 billion in 2023 to $366.9 billion in 2024 and $519.4 billion in 2025.[Schwab 2025 Form 10-K]· primary
Evidence against
- Schwab's revenue declined 0.093 in 2023, illustrating that interest-rate and client-cash cycles can interrupt long-term growth.[Schwab 2025 Form 10-K]· primary
Bull
low confidence$154.76
IV / share
+40.2% vs $110.38
- Explicit cash flows
- $29.40
- Terminal value
- $125.36
- Net cash
- $0.00
- Intrinsic value / share
- $154.76
81.0% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth20.0% → 13.0% → 11.0% → 10.0% → 8.5%low
How derived: This case extends the 0.21 second-quarter 2026 growth rate into the first forecast year and then assumes sustained share gains, asset gathering, lending demand, and broader product adoption keep growth near the upper end of management's long-term framework.
Why this confidence: Current reported growth and client metrics support near-term upside ↑, Sustaining double-digit growth for several years exceeds the central company framework ↓
Measured by
- Total client assets, year-end$12Treported
- Core net new client assets, annual$519Breported
- Client cash as a share of client assets, year-end9.7%reported
- Active brokerage accounts, year-end38,506,000reported
Evidence for
- Second-quarter 2026 revenue grew 0.21, active brokerage accounts reached 39.8 million, client assets reached $13.08 trillion, and core net new assets grew 0.49.[Schwab Q2 2026 results]· primary
Evidence against
- Management's long-term financial formula calls for high-single-digit to low-double-digit revenue growth, below most of this case's early path.[Schwab 2026 Investor Day]· primary
Operating margin55.0%low
How derived: Starting from the 0.543 adjusted second-quarter 2026 pre-tax margin, this case assumes revenue grows faster than expenses and technology improves productivity enough to sustain a 0.55 operating-profit proxy.
Why this confidence: Recent adjusted profitability is already close to the target ↑, The target requires persistent scale benefits and limited price competition ↓
Measured by
- Total client assets, year-end$12Treported
- Pre-tax profit margin, annual47.9%reported
- Client cash as a share of client assets, year-end9.7%reported
Evidence for
- Adjusted pre-tax profit margin reached 0.543 in second-quarter 2026, while revenue grew faster than expenses.[Schwab Q2 2026 results]· primary
Evidence against
- The comparable GAAP pre-tax margin was 0.519, and current acquisitions and growth investments create costs excluded from the adjusted measure.[Schwab Q2 2026 results]· primary
Tax rate22.5%medium
How derived: The assumption stays close to the 0.228 effective rate reported in 2024 and 2025 and assumes recurring credits and equity-compensation benefits offset most state-tax pressure.
Why this confidence: Two consecutive audited years near the selected rate ↑, Assumption is more favorable than current management planning ↓
No tracked driver measures this assumption yet.
Evidence for
- Schwab's effective tax rate was 0.228 in both 2024 and 2025, with research-and-development and other credits reducing the statutory-plus-state rate.[Schwab 2025 Form 10-K tax note]· primary
Evidence against
- Management's 2026 planning assumption was approximately 0.235, above this case's rate.[Schwab 2026 Winter Business Update]· primary
Reinvestment rate22.0%low
How derived: Despite faster growth, the case assumes Schwab's existing digital platform, positive operating leverage, and strong capital generation limit required retained investment to 0.22 of after-tax operating profit.
Why this confidence: Existing platform scale and demonstrated capital returns ↑, Low reinvestment alongside rapid lending growth is an aggressive combination ↓
Measured by
- Core net new client assets, annual$519Breported
- Pre-tax profit margin, annual47.9%reported
Evidence for
- Management's long-term framework explicitly combines organic growth with positive operating leverage, enhanced efficiency, and opportunistic capital returns.[Schwab 2026 Investor Day]· primary
Evidence against
- Bank loans grew 0.33 year over year and margin loans increased 0.30 quarter over quarter in second-quarter 2026, potentially requiring substantial incremental capital and funding.[Schwab Q2 2026 results]· primary
Terminal growth3.0%low
How derived: The rate assumes Schwab remains a structural share winner after the explicit forecast, but it is capped at 0.03 to remain below current nominal Treasury yields and far below management's medium-term revenue ambition.
Why this confidence: Consistent account and organic asset growth support durable expansion ↑, The assumption requires decades of continued market-share gains ↓
Measured by
- Core net new client assets, annual$519Breported
- Active brokerage accounts, year-end38,506,000reported
Evidence for
- Active brokerage accounts grew 0.06 in 2025 and core net new client assets produced a 0.051 organic growth rate.[Schwab 2025 Form 10-K]· primary
Evidence against
- Client cash fell from 0.105 of client assets in 2023 to 0.097 in 2025, showing that client asset growth does not automatically translate proportionately into balance-sheet revenue.[Schwab 2025 Form 10-K]· primary
Valuation robustness
reliability of the estimate, not a stock rating57 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 79% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- The reinvestment assumption is low-confidence.→ reinvestment
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | 5.2% | 10.34 | 460.0% | 1.83B | 0.4% |
| Q1 2025 | 18.1% | 3.43 | 518.7% | 1.82B | -0.5% |
| Q2 2025 | 24.8% | 1.67 | 170.7% | 1.82B | -0.7% |
| Q3 2025 | 26.6% | 0.22 | -97.9% | 1.81B | -1.3% |
| Q1 2026 | 15.8% | 4.11 | 20.0% | 1.75B | -3.8% |
| Q2 2026 | 20.9% | 2.37 | 41.4% | 1.74B | -4.6% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The input is the U.S. Treasury's 10-year constant-maturity par yield reported for September 4, 2026.
The input uses Aswath Damodaran's July 1, 2026 forward-looking implied U.S. equity risk premium based on trailing distributions with adjusted payout.
The input is SCHW's closing price at 4:00 p.m. Eastern Time on September 4, 2026.
Generated 9/6/2026, 2:43:50 AM · pipeline v1.2.0