Value
6.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 7.0 |
| P/S | 5.9 |
| Fwd P/E | 8.8 |
| PEG | 6.6 |
| Analyst target | 6.0 |
- ▸Forward P/E: 12.6x
- ▸PEG: 1.09
SCHW · Why this verdict
Why Charles Schwab Corporation (The (SCHW) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Charles Schwab has beaten earnings in 3 of the last 4 quarters, carries 38% operating margins rated best-in-class among peers, and has 14.8% upside to the analyst target of $104.45, but trades below its 200-day moving average in a death cross recovery and faces regulatory concentration risk tied to Federal Reserve policy.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock is in a death cross technical pattern — the 50-day moving average has crossed below the 200-day — and trades below the 200-day moving average, which historically signals a period of increased selling pressure before a sustainable recovery can be established. Bear case | Price crosses back above the 200-day moving average and holds above it for at least 30 consecutive trading days. | →Stable |
| CounterMACD is improving at an RSI of 55, and the momentum score of 5.9 is recovering — these are early signs that the death cross technical pattern is being absorbed and a reversal is developing. | ||
Operating and net margins of 38% are rated best-in-class relative to capital markets peers, driven by the company's scale advantage in discount brokerage and asset management, which provides a structural earnings floor regardless of market volume levels. Quality breakdown | Operating margins remain above 30% in at least 3 of the next 4 reported quarters, maintaining the margin premium over peers. | →Stable |
| CounterSchwab's margins are heavily exposed to net interest income from client cash sweeps; if interest rates fall materially, the margin advantage shrinks quickly as the yield differential between client cash and funding costs compresses. | ||
Earnings growth was among the stronger in the financial services sector with 3 consecutive beats, and the overall growth score of 8.1 out of 10 reflects that the business is in an earnings expansion phase following the TD Ameritrade integration. Scores | Earnings growth exceeds 15% year over year in the next annual period, reflecting continued integration benefits and rising asset management fees. | →Stable |
| CounterThe Schwab earnings recovery story has been well understood by the market for over a year; much of the integration upside may already be priced in, and the next catalyst would need to come from organic client acquisition rather than cost synergies. | ||
Analysts target $104.45 — approximately 15% above the current $90.95 — and positive news sentiment of +0.75 has upgraded the view, indicating the analyst community sees a recovery path that the current price has not yet reflected. Sentiment breakdown | Price rises above $100, more than 10% above the current $90.95, within 12 months as the recovery thesis progresses. | →Stable |
| CounterNews-driven upgrades to price targets can be based on short-lived sentiment rather than durable fundamental changes; Schwab's price target has been above market for extended periods during 2024 without the stock fully closing the gap. | ||
The stock is in a death cross technical pattern — the 50-day moving average has crossed below the 200-day — and trades below the 200-day moving average, which historically signals a period of increased selling pressure before a sustainable recovery can be established.
→StableBear case
- Expectation
- Price crosses back above the 200-day moving average and holds above it for at least 30 consecutive trading days.
CounterMACD is improving at an RSI of 55, and the momentum score of 5.9 is recovering — these are early signs that the death cross technical pattern is being absorbed and a reversal is developing.
Operating and net margins of 38% are rated best-in-class relative to capital markets peers, driven by the company's scale advantage in discount brokerage and asset management, which provides a structural earnings floor regardless of market volume levels.
→StableQuality breakdown
- Expectation
- Operating margins remain above 30% in at least 3 of the next 4 reported quarters, maintaining the margin premium over peers.
CounterSchwab's margins are heavily exposed to net interest income from client cash sweeps; if interest rates fall materially, the margin advantage shrinks quickly as the yield differential between client cash and funding costs compresses.
Earnings growth was among the stronger in the financial services sector with 3 consecutive beats, and the overall growth score of 8.1 out of 10 reflects that the business is in an earnings expansion phase following the TD Ameritrade integration.
→StableScores
- Expectation
- Earnings growth exceeds 15% year over year in the next annual period, reflecting continued integration benefits and rising asset management fees.
CounterThe Schwab earnings recovery story has been well understood by the market for over a year; much of the integration upside may already be priced in, and the next catalyst would need to come from organic client acquisition rather than cost synergies.
Analysts target $104.45 — approximately 15% above the current $90.95 — and positive news sentiment of +0.75 has upgraded the view, indicating the analyst community sees a recovery path that the current price has not yet reflected.
→StableSentiment breakdown
- Expectation
- Price rises above $100, more than 10% above the current $90.95, within 12 months as the recovery thesis progresses.
CounterNews-driven upgrades to price targets can be based on short-lived sentiment rather than durable fundamental changes; Schwab's price target has been above market for extended periods during 2024 without the stock fully closing the gap.
Per-dimension breakdown
Quality
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.4 |
| ROA | 1.3 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 2.5 |
| Moat | 6.9 |
| Piotroski F | 7.8 |
- ▸Strong margins: 38%
- ▸Strong Piotroski F-Score: 7/9
Growth
8.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.5 |
| EPS growth | 9.7 |
Momentum
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.9 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA (recent, shallow — too early to call)
Sentiment
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 7.5 |
| Price target | 8.3 |
- ▸LLM news sentiment: +0.41 (n=5)
- ▸Analyst upside: 27%
Insider
4.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.4 |
| holder change | 5.1 |
- ▸Modest insider selling — $51,925,266 (0.033% of mkt cap)
Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.0 |
| quality rank | 7.1 |
| growth rank | 4.1 |
- ▸Best-in-class margins
Technical
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.3 |
| support resistance | 3.0 |
| 52w position | 7.1 |
Risk (lower is worse)
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| volatility | 7.0 |
| put call | 3.0 |
| implied vol | 6.8 |
| max pain risk | 3.0 |
| beta | 8.4 |
| debt equity | 4.6 |
| news risk | 6.0 |
- ▸Elevated put/call: 1.54
- ▸Above max pain $55
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.9 |
| dividend safety | 7.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/0M
- ▸Dividend: 140.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (8)
- MOMENTUM:6.2>=5.5
- ASYMMETRY:1.7>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:25d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- DEATH_CROSS:momentum=6.2>=5.0 recovering
Reward-to-Risk
1.72
Upside
+14.2%
Downside
8.3%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 61
EdgeCATALYST — Earnings in 25d with 3/4 beat streak
SuitabilityMODERATE — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.2>=5.5. Top dim: Growth at 8.1; weakest: Peer rank at 3.8. No conviction either direction.
The strongest dimensions are Growth at 8.1, Sentiment at 7.6, and Value at 6.9; the weakest are Peer rank at 3.8, Insider at 4.0, and Technical at 4.5. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 1.72 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Operating and net margins of 38% are rated best-in-class relative to capital markets peers, driven by the company's scale advantage in discount brokerage and asset management, which provides a structural earnings floor regardless of market volume levels.
Trip ifOperating margin falls below 25%, declining more than 13 percentage points from the current 38% level, signaling competitive margin erosion.
- P2Earnings growth was among the stronger in the financial services sector with 3 consecutive beats, and the overall growth score of 8.1 out of 10 reflects that the business is in an earnings expansion phase following the TD Ameritrade integration.
Trip ifEarnings growth falls below 5% year over year in the next annual period, indicating the integration tailwind has faded.
- P3Analysts target $104.45 — approximately 15% above the current $90.95 — and positive news sentiment of +0.75 has upgraded the view, indicating the analyst community sees a recovery path that the current price has not yet reflected.
Trip ifAnalyst consensus price target drops below $85, more than 6% below the current price of $90.95, reflecting downward estimate revisions.
- P4The stock is in a death cross technical pattern — the 50-day moving average has crossed below the 200-day — and trades below the 200-day moving average, which historically signals a period of increased selling pressure before a sustainable recovery can be established.
Trip ifPrice falls below $82, more than 10% below the current $90.95, confirming a failed death-cross recovery attempt.