Charles Schwab falls after quarterly results show mixed signals

What happened

Charles Schwab (SCHW) fell 2.7% on October 15, 2026, because of quarterly results that beat earnings estimates and showed strong client inflows. The company reported earnings per share of $1.69 against $1.65 expected, 2.4% above estimates, and disclosed record core net new assets of $190.4 billion for the quarter.

How big was the move

The stock closed at $94.16 after opening 3.5% below the previous close, with trading volume 2.2 times its 20-day average. The session’s decline was 1.9 times a typical daily move for this stock. The S&P 500 rose 0.3% on the day while the Financial Services sector median rose 1.1%, leaving the stock 3.8 percentage points worse than the sector median. Over the last five sessions the stock had fallen 2.8% and its market value stood at $168.17 billion.

The technical picture

Technically the stock traded below its major moving averages: 4.3% below its 20-day moving average, 10.1% below its 50-day moving average and 4.1% below its 200-day moving average. The 50-day average is above the 200-day average, a sign of an established uptrend, yet the shares were 17.8% below the 52-week high and had fallen 10.5% over one month. The Relative Strength Index (14 days) read 32, a neutral-range reading between 30 and 70. Volatility was 23% annualized over 60 days, lower than 80% of its own readings over five years, and the stock’s beta of 0.82 indicates it tends to move less than the market.

Over three months the stock had fallen 7.3%; over one year it had risen 0.8%, leaving it 15.7 percentage points behind the S&P 500 over that period. In the past five years the stock recorded 73 sessions with a decline of at least 2.7%; twenty trading days later the median result was a gain of 1.7% and 42 of 73 were higher.

Fundamentals and valuation

For the four quarters through September 30, 2026, the company reported revenue of $26.46 billion, a decline of 2.6% from a year earlier, and diluted earnings per share of $5.86, which rose 37.2% year over year. Gross margin was 80.4% versus 84.4% a year earlier, and operating margin was 36.0% versus 39.0% a year earlier. Free-cash-flow margin stood at 12.5% and return on invested capital was 2.0%. The balance sheet showed net debt of 0.0 times EBITDA and share count over one year decreased by 4.3%.

On valuation, the stock traded at 16.1 times trailing earnings and 14.5 times expected forward earnings. That trailing multiple was lower than 95% of its own readings over the past five years, where the five-year median was 23.2 times earnings. Free-cash-flow yield was 2.0%.

The quarterly report also included stronger short-term operating metrics: revenue for the quarter was $7.17 billion, net income was $2.91 billion and diluted EPS was reported at $1.62 in one company disclosure for the period ended September 2026. Those quarterly figures contrasted with the slightly different EPS disclosure of $1.69 used in other company statements and in consensus comparisons for the session.

Earnings and analyst expectations

Schwab reported its results on October 15, 2026, and beat EPS expectations by 2.4%, reporting $1.69 versus $1.65 expected. The company has beaten estimates for ten consecutive quarters, and the average surprise over the last four reports was 2.7% above estimates. Typical two-day reactions after recent reports were modestly negative, with the typical two-day reaction after recent reports showing a fall of 0.5%.

Analysts place a consensus price target of $120.33, 27.8% above the closing price, based on 51 analysts with a consensus rating of Buy and 57% of ratings at Buy. Management said results reflected stronger client asset inflows, lending and interest income. They also highlighted momentum from net interest margin expansion, operating leverage, and higher lending and trading activity, and outlined initiatives including artificial-intelligence efforts, expanded trading products and plans to broaden offerings into prediction markets and long/short strategies.

News coverage emphasized both the company’s strong growth metrics and the market’s mixed reaction. Independent reporting of record third-quarter results and the $190.4 billion of core net new assets came through company releases and third-party outlets, while market headlines noted the post-report share decline.

What to watch

• January 20, 2027: next scheduled earnings report
• Record core net new assets of $190.4 billion reported for the quarter
• Performance metrics: revenue $7.17 billion for the quarter and net income of $2.91 billion as reported in quarterly results
• Analyst consensus price target $120.33, 27.8% above the closing price
• Similar sessions in the past five years: 73 sessions with a decline of at least 2.7%; twenty trading days later the median result was a gain of 1.7% and 42 of 73 were higher.