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Bull of the Day: Charles Schwab (SCHW)

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Key Takeaways

  • The Charles Schwab Corp. saw record earnings and revenue in Q2 of 2025.
  • It raised its share buyback program to $20 billion.
  • Shares of Schwab recently hit new all-time highs, up 31.5% year-to-date.

The Charles Schwab Corp. (SCHW - Free Report) just posted record revenue and earnings per share in the second quarter of 2025. This Zacks Rank #1 (Strong Buy) grew revenue by 25% in the quarter.

The Charles Schwab Corp. provides financial services including wealth management, securities brokerage, banking, asset management, custody and financial advisory services to individuals and independent investment advisors.

It operates a broker-dealer subsidiary, Charles Schwab & Co., Inc., which provides investment services including mutual funds, retirement planning, and financial planning.

The Charles Schwab Corp. has 37.5 million active brokerage accounts, 5.6 million workplace plan participant accounts, 2.1 million banking accounts and $10.8 trillion in client assets.

Schwab Beat Again in the Second Quarter of 2025

On July 18, 2025, Schwab reported its second quarter 2025 results and beat the Zacks Consensus for the 10th consecutive quarter.

Earnings were a record $1.14 versus the Zacks Consensus of $1.09. 

Net revenue rose by 25% to a record $5.9 billion.

Continuing with the records, total client assets rose 14% year-over-year to a record $10.76 trillion.

Core net new assets rose 31% to $80.3 billion which brought year-to-date asset gathering to $218 billion. That’s up 39% year-over-year.

New brokerage account openings increased 11% year-over-year to 1.1 million, with active brokerage accounts totaling 37.5 million and total client accounts of 45.2 million.

Daily average trading volume remained robust, up 38% year-over-year, at 7.6 million.

Analysts are Bullish on Schwab for 2025 and 2026

What wasn’t to like in the quarter? The business is operating at a high level. The analysts are bullish.

9 earnings estimates were revised higher for 2025 since the earnings report, with none being cut. That has pushed up the Zacks Consensus Estimate to $4.56 from $4.43.

That’s another 40.3% earnings growth as Schwab only made $3.25 last year.

The analysts are also bullish on 2026. 9 earnings estimates were revised higher for next year in the last week as well, pushing up the Consensus. The Zacks Consensus is now calling for $5.35, or another 17.4% in earnings growth.

This is what it looks like on the 5-year chart.

Zacks Investment Research
Image Source: Zacks Investment Research

Schwab Authorizes a New $20 Billion Stock Buyback Plan

Schwab is shareholder friendly. On July 24, 2025, Schwab’s Board of Directors replaced its previous share repurchase authorization, which had $6.9 billion remaining, with a new authorization approving repurchases totaling $20 billion.

Shares may be purchased through the open market or privately negotiated transactions based on prevailing market conditions.

Schwab also pays a dividend which is currently yielding 1.1%.

Schwab Shares Break Out to New All-Time Highs

2025 has been a good year for Schwab shareholders, with the stock outperforming the S&P 500 year-to-date.

Zacks Investment Research
Image Source: Zacks Investment Research

It also posted new all-time highs in the last week.

Yet Schwab is still attractively valued. It trades with a forward price-to-earnings (P/E) ratio of 21.2. A P/E ratio under 15 is considered a value, but 21x is in line with the S&P 500. 

But given the big earnings growth expected this year, it has a PEG ratio, which combines the P/E ratio with growth, of just 0.94. A PEG ratio under 1.0 usually indicates a company has both growth and value. That’s a rare combination.

For those investors looking for a large cap financial services company with double digit earnings growth and attractive valuations, Schwab should be on your list.


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