MeritValue

SCHWAB CHARLES CORP

SCHWdata completeness 100%19 fiscal years on file
The thesis, from the filings

SCHWAB CHARLES CORP earns about 159% on invested capital, far above its ~9% cost of capital, and has bought back 5% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $34.04 and $313.3 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$18.5B1$20.8B2$18.8B3$19.6B3$23.9B3
Net income$5.86B4$7.18B5$5.07B6$5.94B6$8.85B6
Operating cash flow$2.12B7$2.06B8$19.6B9$2.67B9$9.31B9
Capital expenditure$916M10$971M11$700M12$620M12$548M12
Free cash flow (derived)$1.2B7$1.09B8$18.9B9$2.05B9$8.76B9
Total debt$26.8B13$17.3B14$015$016$1.9B16
Cash & equivalents$63B17$40.2B18$43.3B19$42.1B19$46B19
Diluted shares1.90B1.89B1.83B1.83B1.81B

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$273.22
your share of equity
Profit it earned you last year
$48.93
Free cash flow it threw off
$48.44
Debt you’d be carrying
$10.5

10 shares is a claim on $273.22 of net worth that earned you $48.93 and generated $48.44 of cash last year, against $10.5 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
159% avg · 5y
FY21 31%FY22 61%FY23 —FY24 207%FY25 339%

It earned about 159% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−5% shares · 5y

Share count is down 5% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has fallen 93% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $34.04 and $313.3 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$313.3
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$8.76B
DCF · Growth Exit 5Y
$182.33
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$8.76B
Earnings Power Value
$34.04
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$5.94B
  • growthAssumed0.0%
Graham Number
$53.47
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $182.33
The three cases
Bear0.0%$93.61
Base20.0%$182.33
Bull20.0%$182.33

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000316709-24-000018 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0000316709-25-000010 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0000316709-26-000009 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0000316709-24-000018 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000316709-25-000010 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000316709-26-000009 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000316709-24-000018 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000316709-25-000010 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000316709-26-000009 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000316709-24-000018 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000316709-25-000010 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0000316709-26-000009 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0000316709-22-000009 (LongTermDebt)
  14. 10-K · period ending 2022-12-31 · accession 0000316709-23-000009 (ShortTermBorrowings)
  15. 10-K · period ending 2023-12-31 · accession 0000316709-25-000010 (CommercialPaper)
  16. 10-K · period ending 2024-12-31 · accession 0000316709-26-000009 (CommercialPaper)
  17. 10-K · period ending 2021-12-31 · accession 0000316709-24-000018 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0000316709-25-000010 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0000316709-26-000009 (CashAndCashEquivalentsAtCarryingValue)