SCHW Stock Analysis: AI Score, Valuation, Performance and Upside
SCHW (Charles Schwab) is the dominant retail brokerage following its TD Ameritrade acquisition, with trillions in client assets and significant net interest income from client cash balances — but facing interest rate sensitivity as client cash moves to higher-yielding alternatives. Morgan Stanley's acquisition of E*TRADE created a different model: combining self-directed brokerage with advisor-driven wealth management for a broader wealth client spectrum.
SCHW vs MS (post-E*TRADE) is pure-play retail brokerage scale (Schwab's dominant position in custody, self-directed investing, and RIA services with significant interest rate income sensitivity) versus integrated wealth management (Morgan Stanley's E*TRADE acquisition enabling both self-directed and advisor-assisted wealth services across client segments) — two models for winning the long-term wealth management client relationship.
SCHW holds the edge across 3 of 5 key metrics in this comparison. MS has delivered stronger 1-year price return (+11.02% vs -2.51%), though SCHW has the better forward P/E setup (14.11x vs 15.75x for MS). On fundamentals, MS is growing revenue faster (28.00%), while SCHW maintains the higher operating margin (52.28%) — a classic growth-versus-profitability split. Analyst consensus implies meaningfully more upside for SCHW (+13.43%) than for MS (+10.17%).
Human Wall Street analysts' price targets, typically implying a ~12-month view — a separate signal from this site's own AI Prediction Signal further down the page, which is a 5-/30-day machine-learning forecast based on price history alone.
- Want exposure to the dominant U.S. retail brokerage with the strongest brand, client asset scale, and thinkorswim platform for active traders following the TD Ameritrade integration
- Believe Schwab's cash sweep model will benefit when interest rates normalize and client money flows back from money market funds into Schwab sweep accounts, restoring high-margin net interest income
- Value Schwab's RIA custodian franchise as a growing fee-based revenue stream as registered investment advisors select Schwab to custody their client accounts
- Want broad financial services exposure including investment banking, institutional trading, and the E*TRADE self-directed brokerage — Morgan Stanley's diversified revenue mix across market cycles
- Value the E*TRADE acquisition as expanding Morgan Stanley's addressable market down into mass-affluent self-directed investors who may eventually migrate to full advisor relationships
- Prefer Morgan Stanley's balance sheet strength and financial institution diversification versus Schwab's more concentrated net interest income sensitivity to the deposit/sweep rate spread
| Metric | SCHW | MS |
|---|---|---|
| AI scorei | 51.5 | 63.0 |
| AI ranki | #359 | #86 |
| Latest closei | $91.96 | $180.57 |
| 1M returni | -12.55% | -10.79% |
| 3M returni | -9.45% | -16.21% |
| 6M returni | -0.35% | -4.37% |
| 1Y returni | -2.51% | +11.02% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | SCHW | MS |
|---|---|---|
| 1Y ago | $9.84K (-1.6%) started 2025-10-16 | $11.28K (+12.8%) started 2025-10-16 |
| 5Y ago | $12.67K (+26.7%) started 2021-10-18 | $23.25K (+132.5%) started 2021-10-18 |
| 10Y ago | $36.58K (+265.8%) started 2016-10-17 | $97.03K (+870.3%) started 2016-10-17 |
Hypothetical — past performance does not guarantee future results.
| Metric | SCHW | MS |
|---|---|---|
| Market capi | $190.5B | $337.31B |
| Trailing P/Ei | 20.07 | 17.36 |
| Forward P/Ei | 14.11 | 15.75 |
| Price/Salesi | N/A | 3.31 |
| EV/Revenuei | 6.77 | 2.78 |
| Analyst targeti | $124.95 | $236.62 |
| Target upsidei | +13.43% | +10.17% |
| Metric | SCHW | MS |
|---|---|---|
| Revenue growthi | 20.90% | 28.00% |
| Earnings growthi | 42.60% | 62.40% |
| EPS growthi | +42.60% | +62.40% |
| FCF margini | N/A | N/A |
| Operating margini | 52.28% | 41.57% |
| Profit margini | 38.79% | 25.90% |
| ROIC proxyi | 20.27% | 17.97% |
| Return on equityi | 20.27% | 17.97% |
| Dividend yieldi | 1.16% | 2.14% |
| Payout ratioi | 21.49% | 32.31% |
| Dividend growth streaki | No increase yet | No increase yet |
| Betai | 0.75 | 1.21 |
| Debt/equityi | 151.11 | 517.28 |
| Current ratioi | 0.66 | 2.00 |
| Quick ratioi | 0.66 | 1.60 |
Over the past year, SCHW and MS have moved moderately in the same direction (correlation of 0.44), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | SCHW | MS |
|---|---|---|---|
| 1Y | Growthi | -1.55% | +12.84% |
| CAGRi | -1.55% | +12.86% | |
| Volatilityi | 25.26% | 27.99% | |
| Sharpe ratioi | -0.11 | 0.41 | |
| Sortino ratioi | -0.14 | 0.58 | |
| Max drawdowni | 20.39% | 20.99% | |
| Current drawdowni | 19.08% | 20.99% | |
| Avg drawdowni | 7.82% | 5.79% | |
| Ulcer Indexi | 9.98% | 8.09% | |
| Max daily dropi | 7.63% | 6.19% | |
| Max wkly dropi | 13.18% | 8.42% | |
| 5Y | Growthi | +20.18% | +102.76% |
| CAGRi | +3.75% | +15.20% | |
| Volatilityi | 31.88% | 28.81% | |
| Sharpe ratioi | 0.14 | 0.48 | |
| Sortino ratioi | 0.19 | 0.69 | |
| Max drawdowni | 49.70% | 32.38% | |
| Current drawdowni | 19.08% | 20.99% | |
| Avg drawdowni | 18.74% | 10.80% | |
| Ulcer Indexi | 22.94% | 13.72% | |
| Max daily dropi | 12.77% | 9.51% | |
| Max wkly dropi | 32.23% | 13.51% | |
| 10Y | Growthi | +224.77% | +630.80% |
| CAGRi | +12.51% | +22.01% | |
| Volatilityi | 33.14% | 31.41% | |
| Sharpe ratioi | 0.39 | 0.65 | |
| Sortino ratioi | 0.55 | 0.96 | |
| Max drawdowni | 51.08% | 51.33% | |
| Current drawdowni | 19.08% | 20.99% | |
| Avg drawdowni | 17.15% | 11.13% | |
| Ulcer Indexi | 21.85% | 14.67% | |
| Max daily dropi | 12.77% | 15.60% | |
| Max wkly dropi | 32.23% | 26.49% |
| Category | SCHW | MS |
|---|---|---|
| Company | The Charles Schwab Corporation | Morgan Stanley (E*TRADE) |
| Sector | Financial Services | Financial Services |
| Industry | Capital Markets | Capital Markets |
| Core business | Charles Schwab is the largest retail brokerage in the U.S. — combining Schwab's legacy discount brokerage with TD Ameritrade's platform, thinkorswim trading tools, and RIA custodian services after the 2020 acquisition. Schwab operates its bank (Schwab Bank), generates significant net interest income from client cash balances, and provides investment management through Schwab Asset Management. | Morgan Stanley acquired E*TRADE in 2020 for $13 billion, integrating E*TRADE's retail brokerage and banking services into Morgan Stanley's wealth management division. E*TRADE provided Morgan Stanley with mass-affluent self-directed brokerage clients, complementing Morgan Stanley's advisor-driven wealth management for high-net-worth individuals. |
| Investor focus | Investors track Schwab's net interest margin (the spread on client cash balances — a critical revenue driver), client asset levels (total assets in custody determining fee revenue), net new assets from client acquisition, trading revenue, and the Schwab Bank's balance sheet after the 2023 interest rate dislocation. | For E*TRADE comparison purposes, investors evaluate Morgan Stanley Wealth Management segment metrics (net new assets, fee-based client assets, E*TRADE integration progress) and how E*TRADE's self-directed brokerage has been combined with Morgan Stanley's financial advisor network. |
- Scale dominance post-TD Ameritrade — Schwab is by far the largest retail brokerage with trillions in client assets, enabling cost advantages, product breadth, and brand recognition that smaller competitors cannot match
- Client cash monetization — Schwab earns significant net interest income by deploying client cash balances (in Schwab Bank) into higher-yielding investments while paying clients below-market rates; this 'cash sweep' model generates substantial revenue with low marginal cost
- thinkorswim platform (from TD Ameritrade) serves active traders — the most sophisticated retail trading platform in the industry, preventing Schwab from losing active trader accounts to Interactive Brokers or other premium platforms
- Complementary client segments — E*TRADE's self-directed mass-affluent clients and Morgan Stanley's advisor-served ultra-high-net-worth clients serve different but connected wealth segments, with opportunities to upgrade E*TRADE clients into full advisory relationships
- Morgan Stanley financial strength — E*TRADE benefits from Morgan Stanley's AAA/AA credit rating, large balance sheet, and institutional investment banking credibility versus the standalone brokerage model
- Wealth management fee revenue — as E*TRADE clients migrate to fee-based relationships at Morgan Stanley, the revenue becomes more recurring and less trading-transaction-dependent
- Interest rate sensitivity — when rates rose rapidly in 2022-2023, clients moved cash from Schwab's low-yield sweep accounts to money market funds and CDs, shrinking the high-margin cash sweep revenue that Schwab depends on
- 2023 bank stress — rising rates caused unrealized losses in Schwab Bank's bond portfolio (a similar dynamic to SVB); while Schwab's retail base is more stable than SVB's depositor base, the market questioned Schwab's balance sheet resilience
- Fidelity and Vanguard competition — both private (Fidelity) and member-owned (Vanguard) competitors can price aggressively without public shareholder return pressure, creating persistent competitive intensity in the zero-commission era
- E*TRADE brand integration — Morgan Stanley has maintained the E*TRADE brand for self-directed clients while integrating operations; the dual-brand strategy must not confuse clients or dilute either brand's positioning
- Technology integration complexity — combining E*TRADE's technology stack with Morgan Stanley's systems is a multi-year project; technology friction during integration can lead to client attrition
- Self-directed clients may not migrate to advisor relationships — E*TRADE's value proposition for self-directed investors may be undermined if Morgan Stanley pushes too hard to convert them to higher-cost advisor relationships they don't want
Compare more than two at a time
This page is a fixed writeup on SCHW and MS. Our comparison engine is the interactive version: load up to five tickers, switch timeframes, and get the correlation, drawdown, and overlap analysis that a static page can't show.
Add three more names beside SCHW and MS, mixing stocks and ETFs in the same table — useful when the real question is which of a whole peer group to own.
AI score, forward P/E, analyst target upside, operating margin, and revenue growth are scored head-to-head, with a running tally of which ticker leads on how many metrics.
Volatility, Sharpe and Sortino ratios, maximum, current, and average drawdown, Ulcer Index, and worst single-day and single-week drops across every timeframe.
Pairwise daily-return correlation for every combination, so you can see whether two holdings actually diversify each other or just move together.
A scatter plot of forward P/E against return on equity, plus drawdown and 30-day rolling volatility charts, to separate what is cheap from what is merely beaten down.
For ETFs, a top-holdings comparison that exposes hidden overlap between funds. Every comparison exports to CSV for your own spreadsheet work.
Two comparisons a week are free without an account. A 14-day trial removes the limit and adds AI price forecasts, stock rankings, saved watchlists, and the intrinsic value calculator — no credit card required.
Want deeper AI forecasts?
This comparison page is public and free forever. Subscribers can unlock saved watchlists, full AI rankings, detailed forecasts, and interactive analysis tools.
Full valuation workup with AI Score, Monte Carlo forecast, and bull/bear case — free preview, premium data from $3.99.