The firm said it started coverage on the savings and loan holding company based on its belief Charles Schwab has a strong business model and secular growth trends.
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Separately, TheStreet Ratings team rates SCHWAB (CHARLES) CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SCHWAB (CHARLES) CORP (SCHW) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues slightly increased by 9.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- SCHWAB (CHARLES) CORP has improved earnings per share by 27.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SCHWAB (CHARLES) CORP increased its bottom line by earning $0.78 versus $0.69 in the prior year. This year, the market expects an improvement in earnings ($0.96 versus $0.78).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 26.6% when compared to the same quarter one year prior, rising from $256.00 million to $324.00 million.
- 39.21% is the gross profit margin for SCHWAB (CHARLES) CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.64% is above that of the industry average.
- You can view the full analysis from the report here: SCHW Ratings Report