What I'm Watching With Charles Schwab (SCHW) To See If They Beat The Market

By Leo Sun – Apr 1, 2026 at 2:05PM ESTKey PointsHigh interest rates throttled Schwab’s growth in 2022 and 2023.Its business recovered in 2024 and 2025, but it could face more near-term headwinds.Charles Schwab (SCHW 0.89%), one of the largest financial services firms in the United States, is often considered a reliable blue chip stock. Over the past 12 months, its stock has risen 21%, outpacing the S&P 500's 18% gain. But will it stay ahead of the market over the next 12 months? Image source: Getty Images. How fast is Charles Schwab growing? Charles Schwab is a brokerage, a bank, and an asset manager. It generates most of its profits by investing clients' cash balances in U.S. Treasuries, mortgage-backed securities, and other high-quality fixed-income investments. It also generates profits from its asset management fees, advisory fees, and selling its brokerage orders to high-frequency trading (HFT) firms. ExpandNYSE: SCHWCharles SchwabToday's Change(-0.89%) $-0.84Current Price$93.14Key Data PointsMarket Cap$165BDay's Range$90.04 - $95.3552wk Range$65.88 - $107.50Volume622KAvg Vol11MGross Margin83.42%Dividend Yield1.20% Rising interest rates boost Schwab's net interest income from its cash sweep activities, mortgages, loans, and other credit products. However, higher rates can also reduce its trading volume and throttle the growth of its brokerage and wealth management segments. At the end of 2025, Schwab served 46.5 million client accounts with $11.9 trillion in total assets. That's up from 33.2 million client accounts with $8.1 trillion in assets at the end of 2021. Metric 2021 2022 2023 2024 2025 Revenue Growth 58% 12% (9%) 4% 22% EPS Growth 33% 24% (27%) 18% 56% Data source: Schwab. In 2021, Schwab's growth accelerated as low interest rates, stimulus checks, social media buzz, and a fear of missing out drew more retail investors to the market. Its acquisition of TD Ameritrade, which closed in Oct. 2020, amplified those gains. But in 2022 and 2023, the Fed's interest rate hikes throttled its trading activity as the costs of integrating TD Ameritrade squeezed its margins. But in 2024 and 2025, its growth accelerated again as the Fed cut interest rates, it generated synergies from its acquisition of TD Ameritrade, and it gained more registered investment advisors to expand its wealth management business. Will Schwab continue to beat the S&P 500? From 2025 to 2028, analysts expect Schwab's revenue and EPS to grow at CAGRs of 8% and 15%, respectively. Its stock still looks cheap at 17 times this year's earnings. Assuming it matches those estimates and trades at a more generous 20 times earnings by the first quarter of 2027, its stock could rise nearly 40% to $130 within the next 12 months. But to achieve that growth, interest rates need to either hold steady or decline -- and that might not happen if the Middle East conflict and inflation drive the Fed to raise rates instead. While Schwab is still a reliable financial stock for long-term investors, I'd keep an eye on those recent macro challenges and their impact on interest rates to see if it can stay ahead of the market.Read NextMar 31, 2026 •By Catherine BrockWho Owns Ford? Largest Shareholders & Board of DirectorsMar 24, 2026 •By Motley Fool TranscribingSchwab (SCHW) Q4 2025 Earnings Call TranscriptApr 1, 2026 •By Leo SunIs Gold Going to $10,000? Here's What the Charts Are SayingApr 1, 2026 •By Leo SunIs This Fintech Stock Finally Turning the Corner on Profitability?Apr 1, 2026 •By Leo SunWhere Will Nu Holdings Stock Be in 10 Years?Apr 1, 2026 •By Neha ChamariaWhy Newmont Stock Surged on WednesdayAbout the AuthorLeo Sun is a contributing Motley Fool stock market analyst who has worked with the company since 2013, covering technology, consumer goods, industrial, and financial sectors. He became a self-made millionaire by age 40 through long-term investing, crediting lessons from Warren Buffett and Peter Lynch. Leo is a regular guest on CNBC Asia providing stock analysis on Chinese technology companies, including Tencent, Baidu, and Alibaba. He previously wrote for InvestorGuide and holds a bachelor’s degree in English from the University of Texas at Austin.TMFSunLionX@TMFSunLionStocks MentionedCharles SchwabNYSE: SCHW$92.90(-1.15%)-$1.08*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.