Introducing Valuation Models! 
Key Takeaways:
- Charles Schwab stock could reasonably reach $120/share by the end of 2027, based on analysts’ consensus estimates used in our valuation model.
- That implies a 29% total return from today’s price of $93.10/share, with an annualized return of 11% over the next 2.5 years.
- Charles Schwab operates as a leading financial services company with 37.5 million active brokerage accounts, $10.76 trillion in client assets, and a diversified revenue model.
The Charles Schwab Corporation (SCHW) is a premier financial services company that provides comprehensive wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors.
The financial giant serves over 45 million client accounts with $10.76 trillion in total client assets. Charles Schwab benefits from sustained client-driven growth, with over one million new brokerage accounts opened in the second quarter and $80.3 billion in core net new assets, representing 31% growth compared to the prior year.
With record quarterly revenue of $5.9 billion and exceptional operational efficiency, Schwab continues to demonstrate the power of its diversified business model and best-in-class scale.
With 25% revenue growth in the second quarter, robust client asset gathering of $218 billion year-to-date, and strong balance sheet management including $10.4 billion in reduced bank funding costs, Schwab maintains its position as America’s premier retail brokerage and wealth management platform.
Here’s why SCHW stock could potentially return 11% annually through 2027 and continue delivering steady performance through 2030.
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What the Model Says for SCHW Stock
We analyzed Charles Schwab’s upside using valuation assumptions based on its market-leading position in retail brokerage and sustained growth in client assets.
Based on estimates of 11% annual revenue growth, 49% operating margins, and stable valuation multiples, the model projects SCHW stock could rise from $93/share to $120/share.
That represents a 29% total return and an 11% annualized return over the next 2.5 years.
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for SCHW stock:
1. Revenue Growth: 11%
Schwab delivered exceptional Q2 results, with record revenue of $5.9 billion, a 25% year-over-year increase.
We used an 11% forecast reflecting continued market share gains, sustained client asset growth, and an ability to benefit from rising interest rates and expanding net interest margins.
2. Operating Margins: 49%
Schwab demonstrates exceptional operational efficiency with industry-leading margins driven by scale advantages and disciplined expense management.
Analysts project the company will see continued margin strength as it benefits from operating leverage and further reduces higher-cost funding.
3. Exit P/E Multiple: 18x
Schwab trades at reasonable multiples for a dominant financial services company with consistent growth and market leadership.
We used current valuation levels in our valuation, given the company’s competitive moat and diversified revenue streams.
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What Happens If Things Go Better or Worse?
TIKR’s valuation tool allows investors to test a wide range of outcomes based on how SCHW stock performs through 2030 under different scenarios (these are estimates, not guaranteed returns):
- Low Case: Market volatility and competitive pressure → 7% annual returns
- Mid Case: Steady execution of growth strategy and margin expansion → 13% annual returns
- High Case: Accelerated market share gains and enhanced profitability → 18% annual returns
Even in the conservative case, Schwab stock offers attractive single-digit returns, while the upside scenario could deliver exceptional performance if it successfully captures additional market share and maintains operational excellence.
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TIKR Takeaway for SCHW Stock
Charles Schwab represents a compelling combination of market leadership in retail brokerage, exceptional operational efficiency, and sustained growth in client assets within the expanding wealth management market.
SCHW stock is best suited for investors seeking exposure to the financial services sector, companies with strong competitive moats and consistent execution, and businesses positioned to benefit from rising interest rates and growing retail investment activity.
The combination of record client asset gathering, expanding net interest margins, and disciplined capital allocation makes Schwab stock an attractive consideration for growth-oriented financial services portfolios positioned for long-term outperformance.
Is SCHW stock worth buying today? Use TIKR’s Valuation Model and analyst forecasts to see if it looks undervalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
