Financial - Capital Markets · NYSE
Current Price
$91.16
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on The Charles Schwab Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
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.
ROIC (TTM)
2.0%
ROE (TTM)
19.1%
FCF Yield
1.58%
Based on trailing twelve-month data, SCHW shows a free cash flow per share of N/A and a ROIC of 2.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 1.58% are important context metrics when evaluating SCHW's stock valuation relative to peers.
The intrinsic value of SCHW depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether SCHW is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $91.16. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on The Charles Schwab Corporation: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Financial - Capital Markets industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting SCHW's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For The Charles Schwab Corporation, this means projecting how much free cash flow the Financial - Capital Markets will produce over the next 5-10 years, then discounting those amounts to today's dollars. SCHW's ROIC of 2.0% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For SCHW, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
