Charles Schwab Stock (SCHW) Strong Growth and Good Value in Q3 2025

The Charles Schwab Corporation (NYSE: SCHW) is increasingly capturing investor attention thanks to a striking combination of strong recent earnings, solid growth potential and what appears to be reasonable valuation. In its third quarter of 2025, Schwab delivered a performance that underscores both resilience and momentum in its business model. For long-term investors looking for a company with both value attributes and growth opportunities, Schwab merits serious consideration. In this article we will dive into Charles Schwab recent earnings, stock performance & valuation, growth potential, and the risks investor should consider.

About Charles Schwab

The Charles Schwab Corporation is a major U.S. financial services company that offers a full-service suite of brokerage, banking, wealth-management and advisory services. Founded in 1971 by Charles R. Schwab, the firm has grown over decades into one of the largest publicly-traded investment services companies in the United States. Today Schwab serves individual investors, institutional clients, registered investment advisors and employers via its operating subsidiaries.

Charles Schwab Financial Performance

In the third quarter of 2025, The Charles Schwab Corporation delivered impressive financial results that highlight its strong growth trajectory. Revenue for the quarter reached $6.13 billion, a 26.57% increase from $4.84 billion in Q3 2024. Earnings per share (EPS) surged even more sharply, rising 77.46% year-over-year to $1.26, compared to $0.71 in the same period last year. On a trailing twelve-month (TTM) basis, revenue totaled $22.91 billion, up 21.67% from $18.83 billion a year ago, while TTM EPS rose 66.73% to $4.27, versus $2.56 in Q3 2024. Profitability metrics remain robust, with an operating profit margin of 46.26% and a net profit margin of 35.93%, reflecting strong efficiency and disciplined cost management. The company also demonstrated solid balance-sheet health, posting a Return on Assets (ROA) of 1.79%, a Return on Equity (ROE) of 19.25%, and a Debt-to-Equity ratio of 1.12, indicating prudent leverage levels.

Over the past five years, Charles Schwab has grown its revenue at a 14.7% CAGR and its net income at 19.5%. Although the company’s business growth slowed in 2023, it has rebounded significantly since then.

Charles Schwab Fiscal 2025 Financial Forecast

Looking ahead, analysts forecast Schwab’s 2025 revenue to reach $23.62 billion, representing a 20.49% increase from $19.61 billion in 2024, while Non-GAAP EPS is projected to grow 46.75% to $4.77, up from $3.25 in 2024. Wallstreet analysts maintain a “Buy” rating on the stock, with an average price target of $111.60, implying a 17.36% potential upside, and a highest target of $134, suggesting a 40.93% potential gain from current levels. These strong financial metrics and optimistic forecasts underline Schwab’s continued momentum and attractiveness as a growth and value investment.

SCHW Stock Price Performance and Valuation

At the time this article was written the stock was trading at $95.09, Charles Schwab’s stock has demonstrated strong performance, rising 34.1% over the past year, significantly outperforming the S&P 500’s 15% gain during the same period. Over the longer term, the stock’s momentum is even more impressive, climbing 135.6% over the past five years, compared to the S&P 500’s 94.1% increase. This consistent outperformance highlights investor confidence in Schwab’s business model and earnings growth. 

The company also offers a modest dividend yield of 1.14%, providing investors with steady income in addition to capital appreciation. From a valuation standpoint, Schwab’s price-to-sales (P/S) ratio stands at 7.54 on a trailing twelve-month (TTM) basis, with a forward P/S of 7.3, while its non-GAAP P/E ratio is 21.1 and forward P/E is 19.91.

Based on Fiscal.ai data, if we look at the valuation over the past five years, the forward P/S and forward P/E ratios are around their historical averages. This indicates that the stock is fairly valued, while Charles Schwab’s business is still projected to grow rapidly in the coming years.

Charles Schwab Growth Potential

Charles Schwab growth potential remains strong, driven by several factors.

• Exceptional Client Acquisition and Organic Growth Momentum
  Charles Schwab’s client acquisition and retention are pivotal growth drivers. In Q3 2025, the company opened over 1 million new brokerage accounts for the fourth consecutive quarter, raising total active brokerage accounts to 38 million and total clientaccounts to 45.7 million. Core net new assets soared 44% year-over-year to $137.5 billion, with year-to-date asset gathering up 41%, showcasing Schwab’s ability to capture market share from competitors. Its client-focused approach and award-winning platforms nurture brand loyalty and attract investors.
  Managed Investing Solutions net inflows climbed 40% compared to Q3 2024, evidencing growing adoption of fee-generating advisory services. Additionally, daily average trading volume jumped 30% year-over-year to 7.4 million trades, driven by increased client engagement in derivatives and market volatility, creating diversified revenue opportunities across wealth management, banking, and lending products.
• Net Interest Revenue Expansion and Balance Sheet Optimization
  Charles Schwab’s net interest revenue, its largest revenue source, showed strong growth potential in Q3 2025. Net interest revenue rose 37% year-over-year to $3.05 billion, with net interest margin expanding 21 basis points to 2.86%. This improvement stems from reducing costly bank funding by $12.9 billion to $14.8 billion, strong securities lending generating $183 million, and a 16% increase in client margin balances, which ended the quarter at $97.2 billion.
  Client transactional sweep cash balances grew by $13.5 billion to $425.6 billion, providing low-cost funding that allowed Schwab to retire expensive supplemental funding, including a 96% drop in Federal Home Loan Bank borrowings to $0.9 billion. Stable average interest-earning assets at $419.8 billion and a 19% increase in bank loans contribute to margin expansion. Schwab’s asset mix and evolving Fed rates position it well to maintain margins while managing rate sensitivity.
• Wealth Management and Advisory Services Growth
  Charles Schwab’s wealth management and advisory services drive critical growth by boosting recurring fee-based revenue and deepening client ties. In Q3 2025, asset management and administration fees grew 13% year-over-year to $1.67 billion, supported by organic growth, record equity market highs, and increased investor use of wealth solutions. Client assets under advisory reached $5.81 billion, a 16% increase, while Managed Investing Solutions net inflows surged 40% from Q3 2024. Fee-based managed investing revenues hit $619 million at an average 0.38% fee.
  Schwab's AI-driven investment tools and expanded proprietary ETFs, now $476 billion in assets (up 23% YoY), attract high-value clients. Its advisor platform, serving independent advisors, amassed $5.02 trillion in assets (up 15%) with $81.7 billion net inflows, up 52%. Nearly half of advisors use AI solutions, indicating Schwab’s competitiveness in evolving advisory tech. This dual retail and advisor model diversifies income while solidifying Schwab’s wealth ecosystem role.

Risks to Consider

While Charles Schwab stock looks attractive, we should be mindful of potential risks.

• Market Volatility Risk
  Charles Schwab's revenue and business performance are closely tied to trading activity and the value of assets held by clients. These elements are directly affected by market volatility and fluctuations. When markets are unstable or experience downturns, trading volumes can decline, and clients may withdraw funds, negatively impacting Schwab's earnings. Conversely, volatility sometimes triggers increased trading as investors react to changing conditions, but overall, sustained volatility tends to challenge consistent revenue growth.
• Interest Rate Risk
  Changes in the Federal Reserve’s interest rate policies impact Charles Schwab's net interest margins by affecting the income earned on loans and deposits. Rate cuts or fluctuations influence client behavior in choosing bonds versus equities, creating uncertainty in demand. Schwab's net interest margin was about 2.86% in Q3 2025 but may be pressured by Federal Reserve decisions, affecting the firm's earnings and asset management strategies.
• Competitive Risk
  Charles Schwab faces strong competitive risk from firms such as Fidelity Investments, a leading brokerage and wealth management company. Intense competition from players like Fidelity, Interactive Brokers, Robinhood, and Vanguard can pressure Schwab’s pricing strategies, reduce its market share, and challenge its ability to attract and retain clients. This competitive landscape demands continuous innovation and client service improvements for Schwab to maintain its position.

Read More: Citigroup Stock (C) Good Growth and Good Value in Q3 2025

Conclusion

Charles Schwab stands out as a strong performer with impressive earnings growth, solid profitability, and consistent market outperformance. The company’s robust Q3 2025 results, healthy margins, and optimistic analyst forecasts reinforce its position as a leader in the financial services industry. With reasonable valuation ratios, steady dividend yield, and continued growth potential, Schwab offers an attractive blend of stability and upside. Overall, Charles Schwab remains a compelling long-term investment opportunity for growth-oriented investors.