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Is Charles Schwab (SCHW) Undervalued Following Its Crypto Expansion?

Simply Wall St · 1d ago

Charles Schwab (SCHW) has moved to expand Schwab Crypto by planning to add Solana, Avalanche and Chainlink, giving clients more token choices within the same platform where they already trade bitcoin and ethereum.

Against this crypto expansion backdrop, Charles Schwab’s recent share price return has cooled in the very short term, with the stock down 1.2% over one day and 1.6% over seven days, even as its 90 day share price return of 23.7% and 1 year total shareholder return of 12.7% point to stronger momentum building over a longer horizon.

Scan how Charles Schwab’s crypto push compares with other brokers leaning into digital assets through a curated set of 20 cryptocurrency and blockchain stocks.

Charles Schwab now trades around US$108, while the average analyst price target sits closer to US$125 and internal fair value work points to a smaller discount. Is the current quote already generous, or does it still leave a margin of safety?

Most Popular Narrative: 13.6% Undervalued

The most widely followed narrative for Charles Schwab puts fair value at $125, compared with the last close at $108.05, framing the recent crypto moves against a broader earnings and margin story.

Ongoing digital transformation and operational enhancements (e.g., AI-powered efficiency and automation) are expected to sustainably reduce cost-to-serve and improve client experience at scale, underpinning long-term operating margin expansion. Schwab's industry-leading scale, continued penetration with independent advisors via its custody platform, and launch of new offerings (such as retail alternatives and digital asset products) are expected to enhance recurring fee-based revenues and cement competitive positioning, supporting earnings resilience and long-term profitability.

Read the complete narrative.

Want the full story behind that $125 fair value for Charles Schwab? The narrative leans on a specific mix of revenue growth, thicker margins, and a tighter share count to justify that number. Curious which assumptions really move the model and how much earnings power they imply by the end of the decade? The detailed breakdown sits in the full narrative.

Result: Fair Value of $125 (UNDERVALUED)

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

However, this Charles Schwab narrative could be knocked off course if competition from low cost brokers intensifies or if interest rate and cash monetization pressures persist.

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

Next Steps

With Charles Schwab generating both optimism and some concern, it makes sense to move quickly and stress test the story yourself. To weigh up the key positives against the main risks, start with the 4 key rewards and 1 important warning sign.

Looking for more investment ideas beyond Charles Schwab?

If you stop with Charles Schwab, you might miss other opportunities that fit your style. Use the Simply Wall St Screener to widen your options smartly.

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.