The Charles Schwab Corporation (SCHW) Stock Valuation — PE Analysis
Financial - Capital Markets · NYSE
Current Price
$89.30
PE Ratio (TTM)
15.2x
Intrinsic Value
$129.54
+31.1% margin of safety
COMPETITIVE MOAT
↑Scale and Brand Recognition
Schwab's massive scale provides significant cost advantages in operations and technology. Its strong brand fosters trust among a broad base of retail and institutional investors.
↑Customer Inertia and Ecosystem
High switching costs for clients, especially those with complex portfolios or integrated services, create customer stickiness. The company's broad service offering encourages clients to consolidate their financial needs.
↑Low-Cost Provider Reputation
Schwab's long-standing commitment to low fees and transparent pricing attracts and retains cost-conscious investors. This reputation is a powerful differentiator in the competitive brokerage landscape.
INVESTMENT RISKS
↓Regulatory and Tax Policy Changes
Changes in tax laws or financial regulations could impact client behavior and Schwab's business model. Unexpected withholding issues on IRA withdrawals highlight potential client friction.
↓Interest Rate Sensitivity
Schwab's profitability is significantly influenced by interest rates, particularly on its cash balances. A prolonged period of low rates can pressure net interest revenue.
↓Technological Disruption and Cybersecurity
The rapid evolution of technology, including AI, presents both opportunities and threats. Cybersecurity breaches could severely damage client trust and operational integrity.
Base case
SCHW base case PE valuation
At a current price of $89.3, the base case PE valuation puts SCHW fair value near $129.54 per share. That figure assumes 11.9% yearly earnings growth, a target PE multiple of 14.5x, and a 10% discount rate.
Intrinsic Value
$129.54
Margin of safety
+31.1%
Expected annual return
+7.7%
Base case assumptions: 11.9% annual earnings growth, 14.5x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-27.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the SCHW PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for The Charles Schwab Corporation respond.
Open PE Calculator for SCHWCompany Overview
The Charles Schwab Corporation (SCHW) stands as a prominent financial services enterprise, delivering a comprehensive suite of offerings that encompass wealth management, securities trading and brokerage, banking services, asset administration, custodial solutions, and financial planning advice. Its operations are primarily structured around two core divisions: Investor Services and Advisor Services. The Investor Services segment caters directly to individual retail clients, furnishing a range of services such as brokerage accounts, investment guidance, banking and trust administration, retirement planning, and corporate brokerage offerings. It further assists businesses with the full-service recordkeeping of equity compensation plans (e.g., stock options, restricted stock, performance shares), provides clearing services for retail investors and mutual funds, and offers compliance solutions. Conversely, the Advisor Services segment provides a robust support system for independent investment advisors. This includes custodial services, trading platforms, banking infrastructure, and general operational support. Within this segment, offerings span diverse brokerage accounts for equities, fixed income, margin lending, options, and futures/forex trading. It also facilitates cash management through various instruments, provides access to a broad selection of proprietary and third-party mutual funds and ETFs, and offers comprehensive trading and clearing for these investment vehicles. Furthermore, it delivers sophisticated advice solutions like managed portfolios, separately managed accounts, customized personal financial guidance, and specialized planning. Complementing these are banking products such as checking and savings accounts, first-lien residential mortgages, home equity lines of credit, and pledged asset lines, alongside a full spectrum of trust services including custody, reporting, and administrative roles. As of December 31, 2021, the company maintained an extensive physical presence, with approximately 400 domestic branch offices located across 48 U.S. states and the District of Columbia, in addition to sites in Puerto Rico, the United Kingdom, Hong Kong, and Singapore. Established in 1971, its corporate headquarters are situated in Westlake, Texas.
Financial Metrics — SCHW PE Stock Valuation Data
PE Ratio (TTM)
15.2x
PEG Ratio
0.40
Earnings Yield
6.90%
ROE (TTM)
21.3%
Revenue/Share (TTM)
$18.03
Dividend Yield
1.38%
Debt/Equity
0.78x
Frequently Asked Questions
What is the PE ratio of SCHW?
The trailing twelve-month PE ratio of SCHW reflects how much investors pay per dollar of The Charles Schwab Corporation's earnings. This metric is most useful when compared to Financial - Capital Markets peers and the company's own historical range.
Is SCHW overvalued based on PE ratio?
SCHW's PE of 15.2x combined with a PEG ratio of 0.40 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Financial - Capital Markets, a DCF analysis may be more appropriate.
How do I value SCHW stock using PE ratio?
To value The Charles Schwab Corporation using PE: (1) Compare the current PE (15.2x) against the Financial - Capital Markets median to assess relative pricing, (2) check the PEG ratio (0.40) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of SCHW?
SCHW's PEG ratio is 0.40, calculated by dividing the PE ratio (15.2x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for SCHW stock valuation?
PE ratio gives a quick relative read — how SCHW is priced versus Financial - Capital Markets peers. DCF provides an absolute value based on projected free cash flows. For SCHW, with a strong ROE of 21.3%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See SCHW DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Financial Services valuationsP/E and DCF value SCHW with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-10-27. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.