uploads///rel val

How Charles Schwab Is Valued after Strong Second-Quarter Results


Jul. 23 2018, Updated 7:32 a.m. ET

Price-to-earnings ratio

Charles Schwab’s (SCHW) price-to-earnings ratio stood at 19.74x on an NTM (next-12-month) basis. In comparison, the peer average is 19.47x. When Charles Schwab reported its second-quarter earnings, the stock rose. The stock prices of its competitors also witnessed upward movement, as Schwab’s strong results increased investor confidence in other major brokers.

Charles Schwab’s competitors have the following price-to-earnings ratios on an NTM basis:

  • E*TRADE (ETFC): 15.81x
  • TD Ameritrade (AMTD): 15.17x
  • Interactive Brokers Group (IBKR): 27.43x
Article continues below advertisement

PE ratio on LTM basis

Technological investments, competitive commission rates, and acquisitions are expected to drive the brokerage industry moving forward. Analysts expect the earnings season to be strong, which could help equity markets. Improved markets could help investors regain confidence in equities.

In the second quarter, Charles Schwab mainly benefited from net interest income, which rose YoY as well as sequentially. During the same period, the company saw a YoY rise of 11% in its total expenses.

Charles Schwab’s price-to-earnings ratio on an LTM (last-12-month) basis stood at 29.30x. Other brokerage giants (VFH) have the following PE ratios on an LTM basis:

  • E*TRADE Financial (ETFC): 22.15x
  • TD Ameritrade Holding (AMTD): 33.75x
  • Interactive Brokers Group (IBKR): 16.84x

In the next article, we’ll look at analysts’ views on Charles Schwab and the company’s price target.


More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.