Schwab Stock Gains 6% in a Month: Buy Now or Wait for a Pullback?

Charles Schwab SCHW, one of the leading brokerage firms in the United States, has seen its stock rise almost 6% in a month. The company’s shares even hit an all-time high of $109.05 during yesterday’s trading session. 

Schwab’s peers, Interactive Brokers Group IBKR and Robinhood Markets HOOD, have recorded 7.9% and 20.1% declines, respectively, over the same period. The stock has also outperformed than the industry and the S&P 500.

One-Month Price Performance
 

Image Source: Zacks Investment Research

What Fueled the Surge in SCHW Stock?

As illustrated in the chart above, Schwab shares began trending higher following the release of its second-quarter 2026 results on July 21. The stock has since sustained much of that momentum, extending its upward run despite intermittent periods of sideways trading.
    
SCHW’s earnings and revenues comfortably surpassed the respective Zacks Consensus Estimate, supported by broad-based strength across its businesses. Net revenues reached a record level, driven by robust trading activity, rising demand for advisory services and a stable interest-rate environment since December 2025. Revenues climbed 21% year over year to $7.07 billion, while total client assets reached a record $13.08 trillion.

Revenue Trend
 

Image Source: Zacks Investment Research

Schwab added 1.4 million new brokerage accounts during the quarter. As of June 30, 2026, the company had 39.8 million active brokerage accounts, 2.4 million banking accounts and 5.9 million corporate retirement plan participants.

Further, clients' Daily Average Trades (DATs) surged to a record 11.9 million. Though management does not expect this elevated pace to persist, it now projects DATs of approximately 10.6 million for 2026, up from roughly 8.7 million targeted in the Investor Day scenario, reflecting record year-to-date trading activity.

This, along with favorable trends in trading, lending and equity markets, prompted Schwab to raise its 2026 revenue growth outlook to 17.5-18.5% year over year. Previously, the company had projected revenue growth in the 14-15% range. 

These factors helped fuel the rally in Schwab shares. The advance was further aided by broader market strength, supported by robust corporate earnings, favorable macroeconomic trends and some easing of concerns surrounding the ongoing Middle East conflict.

Other Factors Supporting Schwab

Schwab has continued to build scale in advice and managed investing, which generates higher revenue per client asset than self-directed activity. This has supported steady growth in wealth and banking solutions. Total managed investing solutions revenues recorded a CAGR of 11.1% over the five years ended 2025, while total client assets witnessed a 12.2% CAGR. Both metrics continued to advance in the first half of 2026. 

Prior acquisitions, including TD Ameritrade, USAA’s IMCO assets, Wasmer Schroeder and Motif, have strengthened Schwab’s distribution reach and product capabilities, while Forge adds exposure to private markets. The company’s scale across retail brokerage and RIA custody continues to support durable account growth and net new asset inflows, even during periods of market volatility. 

Schwab is also expanding its adviser base and plans to open roughly a dozen new branches in 2026. Its Teen Investor account further broadens the company’s reach among younger clients and supports long-term relationships. Over time, this continued shift toward advice and managed solutions should enhance monetization of its growing client asset base while reducing reliance on more cyclical trading revenues.

Schwab is moving from product development to rollout, aiming to deepen client engagement and expand fee-based growth. The company launched Portfolio Insights, its first generative AI tool for retail clients, and plans to introduce generative search on schwab.com and an Investor AI assistant in 2026. Like Interactive Brokers and Robinhood, Schwab is expanding into spot cryptocurrency trading, initially offering Bitcoin and Ether. These offerings are designed to personalize advice, improve service efficiency and broaden distribution while retaining human oversight and safeguards.

Schwab’s balance sheet and earnings profile support ongoing capital distributions. The company remains focused on maintaining a low-cost capital structure, which has been supporting its capital distributions. In January 2026, it announced a 19% hike in the quarterly dividend to 32 cents per share. In the past five years, the company raised dividend payouts five times. Schwab announced a new repurchase plan worth $20 billion in July 2025. Management expects to maintain a 20-30% payout of GAAP earnings in the near term.

Analyst Sentiments Bullish for Schwab

Over the past 30 days, the Zacks Consensus Estimate for 2026 and 2027 earnings has moved higher to $6.46 and $7.83, respectively. This implies year-over-year growth of 32.7% for 2026 and 21.1% for 2027.

Earnings Estimates
 

Image Source: Zacks Investment Research

Schwab’s Valuation Analysis

Schwab’s valuation remains a point of contention. The stock's forward 12-month price-to-earnings (P/E) ratio is higher than the industry average, indicating that much of its expected growth is already factored into the stock price. This leaves little room for error and makes the stock vulnerable to any unfavorable developments or earnings misses.

Schwab is currently trading at a trailing 12-month forward P/E of 14.48X, which is above the industry average of 14.00X.

P/E F 12M
 

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In contrast, the SCHW stock is inexpensive compared with Interactive Brokers and Robinhood. At present, Interactive Brokers is trading at 28.87X forward 12-month P/E and Robinhood at 38.17X.

Should You Buy Schwab Stock or Stay on the Sidelines?

Despite elevated expenses, competitive pressures and sensitivity to market activity, Schwab’s growth prospects remain compelling. Strong client asset growth, record trading activity, expanding managed investing revenues and rising brokerage accounts support its earnings trajectory. 

Management’s higher 2026 revenue outlook, upward earnings estimate revisions and continued investments in AI, advisory services and digital assets further strengthen the long-term story. Moreover, SCHW trades at a substantial discount to Interactive Brokers and Robinhood despite solid fundamentals and improving growth visibility. 

Supported by robust capital returns and durable scale advantages, the recent rally does not appear overextended, making Schwab stock worth buying at current levels.

SCHW carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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