Charles Schwab (NYSE:SCHW) Stock Rockets to Record Highs as EPS, Assets, and Margins Surge

NYSE:SCHW Surges to All-Time Highs as Core Profits, Client Assets, and Margins Explode

Earnings-Driven Momentum Pushes NYSE:SCHW to Record Highs with EPS Jumping 56%

Charles Schwab (NYSE:SCHW) has surged to fresh all-time highs, trading in the mid-$90s zone, after delivering a blowout second quarter. The financial brokerage giant posted adjusted EPS of $1.14, beating consensus by $0.04, while total revenue climbed to $5.9 billion, also topping expectations by $110 million. These beats are not isolated events—SCHW has now delivered four straight quarters of double beats, reinforcing the consistency of its core operations. The stock’s rise is not speculative: it's directly backed by 52% year-over-year net income growth, with profit margins reaching a stunning 50.1%, up more than 9 percentage points from Q2 2024.

Record Asset Growth: $10.8 Trillion in Total Client Assets, $80.1B in New Q2 Inflows

The operational backbone of NYSE:SCHW is client asset expansion, and Q2 2025 was a monster quarter on that front. Schwab brought in $80.1 billion in core net new assets, up 31% YoY, pushing year-to-date net new assets to $218 billion. This inflow explosion has propelled total client assets to an unprecedented $10.8 trillion, up 14% over the past year. Notably, this growth comes with over 1 million new client accounts added year-over-year, signaling organic retail expansion in addition to market-driven AuM appreciation. Few financial firms can match this combination of growth and scale at these margins.

Trading Revenue +23%, Net Interest Income +31%: Platform Profitability Expands Sharply

Trading activity on Schwab’s platform surged on the back of Q2’s geopolitical turbulence and tariff-related volatility, boosting trading revenue by 23% to $952 million. But the real engine remains net interest revenue, which rose 31% YoY to $2.82 billion, as the firm capitalized on elevated Fed fund rates and declining funding costs. Interest expenses dropped by nearly $700 million YoY, creating one of the cleanest earnings leverage profiles in the sector.

Management’s execution has also been disciplined: non-interest expenses rose just 3.6%, despite massive growth in revenues and customer accounts. That cost discipline drove operating leverage that transformed revenue into record-level profits, with EPS rising 56% YoY. On a year-to-date basis, earnings per share are up 48%, and consensus now sees full-year EPS growth of 37%—a figure likely to be revised upward after digesting the latest quarter.

Valuation Still Reasonable at 18.3x FY2026 EPS, Below Peers Like IBKR and HOOD

Despite trading at record highs, NYSE:SCHW remains reasonably priced. Using consensus FY2026 EPS estimates of $5.28, shares currently trade at 18.3x forward earnings, slightly below their own 3-year historical average of 18.4x. Compared to Interactive Brokers (IBKR) at 30x forward P/E and Robinhood (HOOD) trading at more than 3x SCHW’s valuation, Schwab offers investors a much cheaper entry point into the brokerage sector, with far superior fundamentals.

Management’s own growth projections suggest 25% EPS CAGR over the next several years, driven by platform scale and asset integration efficiencies. Using a 20x earnings multiple, a justified premium given growth and profitability, fair value on SCHW is recalibrated to $106 per share, implying further upside even after recent gains.

Platform Strength Backed by Insider Confidence and Robust Profit Flow

Schwab’s corporate insiders have shown no signs of exiting on strength. The most recent insider activity confirms net holding, with no major disposition following the Q2 report, a notable signal of internal confidence in continued momentum. Insider alignment remains a valuable signal, particularly as the firm adds new clients and scales its profitability.

Beyond trading and net interest revenue, asset management and advisory fees also grew, contributing to a more balanced revenue mix. Importantly, Schwab avoided overhiring and preserved margin flexibility. Operating expenses excluding interest costs remain tightly managed, proving management is not chasing growth blindly.

Risks: Interest Rate Reversal and Market Calm Would Cool Earnings Velocity

The key risk to NYSE:SCHW remains macro-driven. A rapid decline in interest rates would compress net interest margins, while lower market volatility would reduce trading volumes. These two variables combined were responsible for a large part of the Q2 performance spike. That said, even under normalized conditions, Schwab’s model remains durable. Its massive asset base, digital scale, and sticky client relationships form a strong cushion.

Analysts forecast mid-teens EPS growth from 2026 to 2030, and that forecast assumes more conservative interest rate and trading environments. The risk profile remains asymmetric—more upside surprises if volatility persists or if client flows remain elevated, especially into Schwab's growing ETF and advisory platforms.

Dividend, Buybacks, and Strategic Flexibility Support Long-Term Shareholder Value

While Schwab’s current dividend yield has compressed amid the price rally, the firm remains shareholder friendly. The recent quarter featured continued share repurchases, which aided EPS performance. With over $10 billion in total shareholder capital returned in the last three years, Schwab has balanced reinvestment with reward, building a high-ROE compounder profile.

Future growth will also be supported by Schwab's scale in ETFs like SCHD, where fee revenues benefit directly from broader market tailwinds. The combination of recurring fee income, embedded operating leverage, and an efficient balance sheet creates optionality if economic tailwinds persist into 2026 and beyond.

NYSE:SCHW Poised for Further Upside on Execution, Margin Strength, and Flow Trends

Charles Schwab continues to operate as one of the most profitable and scalable platforms in global financial services. Its massive client asset base, efficient revenue generation engine, and cost control discipline give it the tools to outperform under both bull and choppy markets. With $5.9 billion in quarterly revenue, $2.2 billion in net income, and record client asset flows, NYSE:SCHW remains one of the strongest growth stories in finance—and even at $95+ per share, its valuation does not reflect the full earnings power that lies ahead.

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