Value
6.4/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 6.6 |
| P/S | 5.4 |
| Fwd P/E | 8.4 |
| PEG | 6.7 |
| Analyst target | 5.0 |
- ▸Forward P/E: 13.8x
- ▸PEG: 1.08
SCHW · Why this verdict
Why Charles Schwab Corporation (The (SCHW) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score6.4/10
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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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. | — |
| 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. | ↓Deteriorating |
| 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.
↓DeterioratingBear 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.
↓DeterioratingQuality 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.
—Scores
- 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.
↓DeterioratingSentiment 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
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.8 |
| ROA | 1.4 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 2.6 |
| Moat | 7.5 |
| Piotroski F | 7.8 |
- ▸Strong margins: 39%
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
- ▸Strong Piotroski F-Score: 7/9
Growth
8.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.7 |
| EPS growth | 10.0 |
- ▸Strong growth: 21% YoY
Momentum
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.0 |
| MACD | 6.6 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 80)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 7.5 |
| Price target | 7.2 |
Insider
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.4 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Modest insider selling — $47,011,265 (0.025% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.0 |
| quality rank | 7.3 |
| growth rank | 4.8 |
- ▸Best-in-class margins
Technical
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 1.6 |
| 52w position | 9.7 |
Risk (lower is worse)
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| volatility | 8.0 |
| put call | 7.3 |
| implied vol | 7.7 |
| max pain risk | 3.0 |
| beta | 8.5 |
| debt equity | 4.0 |
- ▸Above max pain $55
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.0 |
| dividend safety | 5.5 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:65d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.1<4.5
- ASYMMETRY:0.6<1.5@spot
Warning (0)
none
Reward-to-Risk
0.58
Upside
+4.5%
Downside
7.7%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 8.8) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.1<4.5, ASYMMETRY:0.6<1.5@spot) reinforce the read. Current asymmetry R:R is 0.58 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 8.8, Sentiment at 7.1, and Quality at 7.0; the weakest are Momentum at 4.1, Technical at 4.4, and Peer rank at 4.6. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 0.58 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Best In Class Operating Margins
Trip ifOperating margin falls below 25%, declining more than 13 percentage points from the current 38% level, signaling competitive margin erosion.
- P2Strong Earnings Growth Trajectory
Trip ifEarnings growth falls below 5% year over year in the next annual period, indicating the integration tailwind has faded.
- P3Analyst Upside And News Tailwind
Trip ifAnalyst consensus price target drops below $85, more than 6% below the current price of $90.95, reflecting downward estimate revisions.
- P4Death Cross Recovery Risk
Trip ifPrice falls below $82, more than 10% below the current $90.95, confirming a failed death-cross recovery attempt.