The Charles Schwab Corporation (SCHW): A Bull Case Theory 

We came across a bullish thesis on The Charles Schwab Corporation on The Diversified Fins Analyst’s Substack by Collin Cook. In this article, we will summarize the bulls’ thesis on SCHW. The Charles Schwab Corporation’s share was trading at $92.73 as of November 28th. SCHW’s trailing and forward P/E were 21.72 and 16.56 respectively according to Yahoo Finance.

The Charles Schwab Corporation, together with its subsidiaries, operates as a savings and loan holding company that provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services in the United States and internationally. SCHW delivered a standout quarter, with results reinforcing the strength of its core franchise and validating the ongoing recovery in key profitability drivers.

Total net revenue reached a record $6.1B, up 5% sequentially and 27% year over year, driven primarily by an 8% Q/Q rise in net interest income and steady growth across trading and asset management fees. Adjusted operating expenses rose only 2% Q/Q, supporting a 51.3% pre-tax margin and record adjusted EPS of $1.31, up 15% Q/Q and 70% Y/Y. Performance exceeded expectations, with revenue and EPS beating consensus by 2% and 5%, respectively.

Core operating trends remained robust: NIM expanded 21 bps to 2.86%, client assets reached a record $11.6T, and asset management balances grew 9% Q/Q. Net new assets of $138B represented a meaningful acceleration in organic growth, supported by improving Ameritrade client flows. Although trading activity softened slightly Q/Q, it remained significantly higher year over year, and the firm continued attracting younger households, strengthening long-term demographic tailwinds. Management reiterated confidence in further NIM expansion and highlighted that supplemental funding has been reduced to within the target range, lowering funding costs and enabling redeployment into higher-yielding securities.

Schwab now expects full-year EPS to finish roughly 2% above its prior outlook, implying ~$4.75. Capital return remained strong, with $2.7B in buybacks during the quarter and leverage ratios comfortably above targets. Plans to launch spot crypto trading in 1H26 and continued investment in branch expansion further support strategic positioning. Overall, the quarter reinforced Schwab’s earnings momentum, improved balance sheet flexibility, and a clear path toward sustained NNA growth and margin expansion.

Previously we covered a bullish thesis on Morningstar, Inc. (MORN) by Flyover Stocks in May 2025, which highlighted its strong moat, deep financial data capabilities, and founder-led stability. The company’s stock price has depreciated approximately by 29.35% since our coverage. This is because the thesis didn’t play out in the short term. The thesis still stands as demand for transparent data remains durable. Collin Cook shares a similar view but emphasizes Schwab’s operating momentum.

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Disclosure: None.