Schwab Sees Further Growth In Assets In January; Cut In Commissions Likely To Attract Greater Volumes

+8.20%
Upside
67.40
Market
72.93
Trefis
SCHW: Charles Schwab logo
SCHW
Charles Schwab

Charles Schwab (NYSE:SCHW) saw a positive start to the year, with a marked improvement across most of its key metrics in January. Interest earning assets, which generate over 45% of the company’s revenues, continued their strong growth (~ 20% year over year). The possibility of a series of hikes in the year ahead has been a major driver of the surge in these assets.

With the demand for tech-advanced products and expert advice on asset management having scaled over time, the brokerage’s assets under management have continued to grow at a notable rate ( 17% year over year in January). The company’s continued efforts in innovating new products – as well as its recent foray into low-cost and efficient digital advisory services – are likely to further boost these assets. Schwab is the among the top 5 ETF providers in the U.S. and, with the launch of the Schwab Intelligent Platform in 2015, was among the first of the established players to enter the robo-advisor industry.

Trading volumes saw a dip in January, after having a positive prior quarter. Amid tough competition from competing full-service and discount brokerages, the company decided to slash its commissions. Trading commissions generate only a small percentage of the company’s overall revenue, and we believe the price cut should help it to recapture market share, and shouldn’t have a major impact on revenue and EPS growth in the near term.

SCHW

See our complete analysis for Charles Schwab.

View Interactive Institutional Research (Powered by Trefis):

Relevant Articles
  1. Charles Schwab Stock To Top The Consensus In Q3
  2. What To Expect From Charles Schwab Stock?
  3. Charles Schwab Stock To Post Mixed Result In Q2
  4. Charles Schwab Stock Has An 84% Upside Potential To Its Pre-Inflation Peak
  5. Charles Schwab Stock Is Undervalued
  6. What To Expect From Charles Schwab Stock In Q4?

Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap

More Trefis Research