Charles Schwab (SCHW): Valuation Spotlight Following Major Branch Expansion and Record Client Growth

If you have been wondering what to do with your Charles Schwab (SCHW) shares following the firm’s latest news, you are not alone. Schwab just pulled back the curtain on an ambitious branch expansion, with over 40 new or expanded locations opening across the country. This includes 16 brand new sites and 25 more set for upgrades or relocations. The company is reinforcing its commitment to in-person service, hiring more than 400 new branch employees and boosting capacity to keep up with rising client demand. That kind of growth story can catch the eye, especially when it is backed by 2.3 million newly opened brokerage accounts and $218 billion in fresh assets in the first half of the year.

This expansion builds on a year that has already seen Schwab’s stock post a 27% gain, with positive returns both in the short term over the past month and even stronger momentum across the past 3 months and year. That performance appears to mirror a business firing on all cylinders, as Schwab integrates past acquisitions, deepens relationships with clients, and scales services in step with a fast-growing retail investor base. While competitors eye asset inflows and changing client needs, Schwab’s investments in physical branches and broader hiring suggest a strategy focused on long-term client growth, rather than simply reacting to current market trends.

With all this in motion, is Charles Schwab’s stock presenting a real buying opportunity now, or is the market already pricing in the firm’s next stage of growth?

Most Popular Narrative: 13.3% Undervalued

According to the most widely followed valuation narrative, Charles Schwab stock is currently considered undervalued, with a fair value significantly above its recent trading price.

Ongoing digital transformation and operational enhancements (for example, AI-powered efficiency and automation) are expected to sustainably reduce cost-to-serve and improve client experience at scale. These changes support long-term operating margin expansion.

Want to know what is powering this bullish outlook? The narrative centers on Schwab’s transformation: more clients, deeper engagement, a bold bet on digital, and a margin strategy similar to those used by the largest tech players. Curious which numbers really back up these ambitious forecasts, and why the consensus thinks Schwab’s future multiple could distinguish it? Explore the metrics and projections that shape this fair value assessment.

Result: Fair Value of $108.37 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising competition from digital-first brokers and volatile interest rates could still put unexpected pressure on Schwab’s profitability and long-term growth trajectory.

Find out about the key risks to this Charles Schwab narrative.

Another View: Discounted Cash Flow Tells a Different Story

While the most popular valuations see upside for Charles Schwab, our SWS DCF model points in the opposite direction. This suggests the shares may actually be trading above their fair value right now. Could the true worth be lower than many expect?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Charles Schwab for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Charles Schwab Narrative

If you are not convinced by the prevailing narratives or want to dig into the numbers on your own terms, you can craft your personal story for Schwab in just a few minutes. Do it your way.

A great starting point for your Charles Schwab research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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