Key Stats for Charles Schwab Stock
- Current Price: $92.28
- Target Price (Mid): ~$164
- Street Target (Mean): ~$116
- Potential Total Return (Mid): ~78%
- Annualized IRR (Mid): ~11% / year
- Earnings Reaction: (0.37%) on April 16, 2026
- Max Drawdown: (14.90%) on March 12, 2026
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What Happened?
Markets have a habit of punishing good news when it isn’t good enough. That is exactly what happened to Charles Schwab (SCHW) on April 16, when the firm reported its best quarter in company history, and the stock fell anyway.
Total net revenues rose 16% year over year to a record $6.5 billion, while adjusted EPS of $1.43 came in 38% above the prior year and beat consensus estimates. Bulls point to record client asset growth and an imminent crypto launch that could open a new revenue stream across 47 million accounts. Bears point to lingering cash sweep litigation and a revenue line that only met, rather than beat, some estimates.
The question investors are searching right now: Does a record quarter at 14.76x forward earnings make Schwab a buy?
The April 16 Spring Business Update transcript makes the bull case hard to dismiss. CEO Rick Wurster reported that the firm attracted $140 billion in core net new assets in Q1, bringing total client assets to $11.8 trillion, up 19% year over year.
March alone was Schwab’s second-highest month of net new asset inflows ever. Managed investing net flows rose 46% and reached an all-time high. Bank lending balances grew to $61 billion, up 29% year over year. CFO Mike Verdeschi confirmed that adjusted pretax profit margin hit 51.4% for the quarter.
On the same day, Schwab formally announced Schwab Crypto, a spot trading offering for Bitcoin and Ethereum, beginning a phased client rollout in the coming weeks, priced at 75 basis points per trade.
The employee pilot was already live. The move places Schwab in direct competition with Robinhood and Coinbase, which have long dominated retail crypto trading among younger investors. With nearly $12 trillion in client assets, Schwab doesn’t need a large crypto market share to generate meaningful incremental revenue. It needs its existing clients to consolidate.
Ahead of earnings, Morgan Stanley, TD Cowen, and Truist Securities all lowered their price targets for Schwab, citing anticipated short-term market volatility and modest forward estimate risks.
That backdrop, combined with a revenue line slightly below some forecasts on net interest income, gave sellers a reason to act despite the historically strong results.
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Is Charles Schwab Undervalued Today?
At $92.28, Schwab trades at 14.76x next twelve months’ earnings, compressed from 20.57x as recently as June 2025. Peers Morgan Stanley and Goldman Sachs trade at 15.93x and 15.47x NTM P/E, respectively, on the TIKR Competitors page, and the peer group median sits around 15x. Schwab trades at a discount to that median despite delivering 38% year-over-year EPS growth in Q1, and that discount has one primary explanation: cash sweep litigation.
Cash sweep programs route uninvested client cash into bank deposits at yields below money market rates, generating net interest income for the broker. The practice has drawn a wave of lawsuits across the industry.
In February 2026, a federal judge ruled that JPMorgan must defend class action claims that its Cash Sweep Program failed to pay a reasonable rate of interest while market rates exceeded 5%. Schwab faces its own version of this scrutiny. If courts or regulators force industry-wide sweep rate increases, the net interest margin that drives a meaningful share of Schwab’s revenue would compress.
Wurster addressed this on the call with notable confidence: “Just as we figured it out as commissions went down, we’ll figure it out if the economics change in this environment.” He pointed to trading fees, wealth management charges, lending spreads, and future fee-based AI advisory offers as alternative monetization levers.
That flexibility argument is either Schwab’s most compelling defense or its most convenient deflection, depending on which side of the trade you sit.
What is harder to argue with is the guidance update. Verdeschi said the firm is tracking above the $5.70 to $5.80 full-year EPS scenario set in January, which had assumed two rate cuts. With the forward curve now pointing toward no cuts in 2026, net interest margin has more room to expand.
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TIKR Advanced Model Analysis
- Current Price: $92.28
- Target Price (Mid): ~$164
- Potential Total Return: ~78%
- Annualized IRR: ~11% / year
See analysts’ growth forecasts and price targets for Charles Schwab stock (It’s free!) >>>
The TIKR mid-case model assumes a revenue CAGR of around 6.5% through the forecast period, conservative against the 15.4% five-year historical average. The two primary growth drivers are net interest revenue expansion as the investment portfolio rotates into higher-yielding assets, and asset management fee growth as clients migrate into managed solutions like Schwab Wealth Advisory. The margin driver is operating leverage, with net income margins projected to expand from around 37% in 2025 toward around 39% in 2026 as revenue growth outpaces expense growth. The primary risk is net interest margin compression from litigation-forced sweep rate increases or unexpected rate cuts.
On the upside, the TIKR high-case scenario produces a target of around $293. The Street’s nearer-term mean target of around $116 already implies roughly 26% upside from today, with 19 of 22 covering analysts at Buy or Outperform.
Conclusion
Watch the July Business Update. Verdeschi specifically flagged a comprehensive refresh of Schwab’s 2026 financial scenario at that event, incorporating Q2 cash trends, the revised rate outlook, and the early economics of Schwab Crypto. If full-year EPS guidance moves meaningfully above $5.80, the 14.76x forward multiple looks too cheap for a firm compounding earnings at the pace Schwab has demonstrated. The discount is real, but so is the business.
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Should You Invest in Charles Schwab?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up Charles Schwab, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track Charles Schwab alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
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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!
