Charles Schwab Corporation Common Stock (SCHW) receives a strong valuation ranking of 73 from InvestorsObserver's data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. SCHW has a better value than 73% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.
Metrics Analysis
SCHW has a trailing twelve month Price to Earnings (PE) ratio of 31 which places it above the histroical average of roughly 15. SCHW is currently trading at a poor value due to investors paying more than what the stock is worth in relation to its earnings. SCHW's trailing-12-month earnings per share (EPS) of 2.27 does not justify its share price in the market. Trailing PE ratios do not factor in the company's projected growth rate, thus, some firms will have high PE ratios caused by high growth recruiting more investors even if the underlying company has produced low earnings so far.
SCHW currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 1.58. The market is currently overvaluing SCHW in relation to its projected growth due to the PEG ratio being above the fair market value of 1. SCHW's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.
Summary
SCHW's valuation metrics are weak at its current price due to a overvalued PEG ratio despite strong growth. SCHW's PE and PEG are worse than the market average resulting in a below average valuation score.
