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Goldman Sachs Group (GS)
:GS
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Goldman Sachs Group
(NYSE:GS)74Outperform
Positive Factors
Earnings Performance
GS outperformed on earnings, trading up ~6% vs. BKX up ~4%, after delivering a strong beat on GBM top-line strength, better-than-expected AWM, and lower comp expense.
Negative Factors
Market Uncertainty
Potential headwinds against strong market expectations include market uncertainty surrounding tariffs, inflation, interest rates, and government policies.
Valuation Concerns
Goldman's shares are downgraded to Market Perform due to elevated valuation and a more balanced risk/reward relationship.
Goldman Sachs Group (GS) vs. S&P 500 (SPY)
Market Cap
$181.34B
Dividend Yield1.94%
Average Volume (3M)2.66M
Price to Earnings (P/E)14.3
Beta (1Y)1.35
Revenue Growth14.80%
EPS Growth77.97%
CountryUS
Employees45,300
SectorFinancial
Sector Strength93
IndustryCapital Markets
Share Statistics
EPS (TTM)40.55
Shares Outstanding312,039,030
10 Day Avg. Volume2,996,280
30 Day Avg. Volume2,661,929
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)N/A
Price to Sales (P/S)3.62
Price to Cash Flow (P/CF)1.00
P/FCF Ratio0.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$680.36Price Target Upside17.07% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Goldman Sachs Group Business Overview & Revenue Model
Company DescriptionFounded in 1869, Goldman Sachs Group, Inc. is a leading global investment banking, securities, and investment management firm. The company provides a range of financial services to clients including corporations, financial institutions, governments and individuals. The company operates through four segments: Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management.
How the Company Makes MoneyGoldman Sachs generates revenue through several key streams. In its Investment Banking segment, the company earns fees from advising on mergers and acquisitions, underwriting for equity and debt issuances, and other financial advisory services. The Global Markets segment provides market-making and trading services, earning income from buying and selling financial products such as equities, fixed income, currencies, and commodities. In Asset Management, Goldman Sachs collects management and performance fees for its services in managing a wide array of investment products, including mutual funds, hedge funds, and private equity. Consumer & Wealth Management generates revenue by offering private wealth management and consumer banking services, including lending and deposit products. Additionally, Goldman Sachs forms strategic partnerships with various financial institutions and technology firms to enhance its offerings and expand its market reach, which also contributes to its revenue.
Goldman Sachs Group Financial Statement Overview
Summary
Goldman Sachs showcases strong financial health with robust revenue and profit growth. The income statement highlights significant profitability improvements and stable margins. The balance sheet is solid, though high leverage poses risks. Cash flow challenges indicate a need for better liquidity management.Income Statement
Goldman Sachs displays a robust performance in its income statement with a consistent revenue growth from $46.25B in 2023 to $52.16B in 2024, showing a growth rate of 12.77%. The gross profit margin remains stable at 100% due to the nature of its business model. Net profit margin improved significantly from 18.41% in 2023 to 27.36% in 2024, indicating enhanced profitability. However, the company experienced fluctuations in EBIT margin, moving from 29.09% in 2023 to 61.71% in 2024, reflecting some volatility in operational efficiency.85
Very Positive
Balance Sheet
The balance sheet indicates a strong equity base with a stockholders' equity of $122B in 2024, resulting in a debt-to-equity ratio of 4.89, which suggests high leverage. The equity ratio stands at 7.30%, indicating a moderate portion of assets financed by equity. Return on equity increased from 7.28% in 2023 to 11.70% in 2024, highlighting improved utilization of shareholder funds. However, the overall high leverage presents potential risks if market conditions change unfavorably.78
Positive
Cash Flow
Cash flow analysis reveals challenges with operating cash flow being negative in 2023, recovering slightly in 2024. The free cash flow remains a concern, with fluctuations in recent years, suggesting potential liquidity management issues. The absence of operating cash flow and free cash flow metrics in 2024 limits comprehensive analysis. This reflects a need for better cash flow management despite improved profitability.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 52.16B | 46.25B | 47.37B | 59.34B | 40.42B | Gross Profit |
| 52.16B | 46.25B | 31.19B | 40.64B | 26.15B | EBIT |
| 32.19B | 13.46B | 34.83B | 27.04B | 12.48B | EBITDA |
| 18.40B | 18.32B | 0.00 | 29.06B | 14.38B | Net Income Common Stockholders |
| 14.28B | 8.52B | 11.26B | 21.64B | 9.46B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 182.00B | 241.58B | 597.57B | 261.02B | 156.53B | Total Assets |
| 1.67T | 1.64T | 1.44T | 1.46T | 1.16T | Total Debt |
| 342.56B | 333.25B | 308.00B | 301.00B | 266.00B | Net Debt |
| 160.46B | 91.67B | -158.94B | 40.00B | 110.00B | Total Liabilities |
| 1.55T | 1.52T | 1.32T | 1.35T | 1.07T | Stockholders Equity |
| 122.00B | 116.91B | 117.00B | 110.00B | 96.00B |
| Cash Flow | Free Cash Flow | |||
| -15.30B | -14.90B | 4.96B | -3.75B | -20.04B | Operating Cash Flow |
| -13.21B | -12.59B | 8.71B | 921.00M | -13.73B | Investing Cash Flow |
| -49.62B | -17.31B | -75.96B | -30.46B | -34.36B | Financing Cash Flow |
| 7.32B | 27.80B | 59.60B | 134.74B | 70.38B |
Goldman Sachs Group Technical Analysis
Negative
581.14
Price Trends
610.55
Negative
583.99
Negative
528.03
Positive
Market Momentum
-4.95
Positive
34.33
Neutral
16.52
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GS, the sentiment is Negative. The current price of 581.14 is below the 20-day moving average (MA) of 633.99, below the 50-day MA of 610.55, and above the 200-day MA of 528.03, indicating a neutral trend. The MACD of -4.95 indicates Positive momentum. The RSI at 34.33 is Neutral, neither overbought nor oversold. The STOCH value of 16.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GS.
Goldman Sachs Group Risk Analysis
Goldman Sachs Group disclosed 31 risk factors in its most recent earnings report. Goldman Sachs Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Goldman Sachs Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $699.73B | 12.67 | 16.96% | 1.84% | 17.07% | 21.78% | |
77 Outperform | $196.32B | 15.32 | 13.16% | 2.81% | 9.17% | 53.77% | |
74 Outperform | $181.34B | 14.33 | 11.70% | 1.94% | 14.80% | 77.97% | |
73 Outperform | $150.66B | 13.45 | 6.08% | 2.86% | 8.20% | 49.26% | |
72 Outperform | $324.49B | 13.28 | 9.18% | 2.19% | 13.06% | 4.94% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
GS
Goldman Sachs Group
581.14
198.67
51.94%
BAC
Bank of America
42.67
7.92
22.79%
C
Citigroup
72.35
17.97
33.05%
JPM
JPMorgan Chase & Co.
250.25
65.91
35.75%
MS
Morgan Stanley
121.72
35.46
41.11%
Goldman Sachs Group Earnings Call Summary
Earnings Call Date: Jan 15, 2025 | % Change Since: 2.19% | Next Earnings Date: Apr 14, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance in both quarterly and annual results, driven by significant revenue growth, especially in Asset & Wealth Management and financing activities. There was a focus on strategic efficiency and capital returns. However, challenges remain with the Platform Solutions' impact on ROE and ongoing regulatory uncertainty. Overall, the highlights significantly outweigh the lowlights.Highlights
Strong Quarterly and Annual Financial Performance
Generated Q4 revenues of $13.9 billion, EPS of $11.95, and ROE of 14.6%. For the full year, increased revenues by 16% to $53.5 billion and EPS by 77% to $40.54, with an ROE improvement of over 500 basis points to 12.7%.
Asset & Wealth Management Growth
Assets under supervision reached a record $3.1 trillion, marking the 28th consecutive quarter of long-term fee-based net inflows. Management and other fees surpassed $10 billion, exceeding the 2024 target.
Record Financing Revenues
FICC financing revenues rose 34% year-over-year, with equities financing revenues up 36%, contributing to a combined record $9.1 billion in financing revenues.
Efficient Capital Management
Returned approximately $3 billion to common shareholders in Q4, including $2 billion in stock repurchases and $965 million in dividends.
Lowlights
Platform Solutions Drag on ROE
Platform Solutions, including the Apple Card partnership, was a 75 to 100 basis point drag on the firm's overall ROE.
Regulatory Uncertainty
Concerns over the lack of transparency in the Federal Reserve's stress testing, leading to a lawsuit filed by major U.S. banks, including Goldman Sachs.
Company Guidance
During the Goldman Sachs Fourth Quarter 2024 Earnings Conference Call, David Solomon outlined the firm's robust financial performance and strategic direction, highlighting key metrics. The firm reported Q4 revenues of $13.9 billion and earnings per share (EPS) of $11.95, with a return on equity (ROE) of 14.6% and return on tangible equity (ROTE) of 15.5%. For the full year, revenues increased by 16% to $53.5 billion, EPS soared by 77% to $40.54, and ROE improved by over 500 basis points to 12.7%. Solomon emphasized Goldman Sachs' leadership in investment banking, with a #1 position in M&A advising and a top-ranked equities business, underpinned by $3.1 trillion in assets under supervision in their Asset & Wealth Management division. The firm has also met or exceeded targets from its 2020 strategic plan, with significant growth in revenues from $37 billion to $54 billion and durable revenue streams contributing to 70% of total revenues in 2024. Additionally, the call touched on the firm's initiatives in efficiency, technology, and regulatory challenges, as well as their strategic focus on capital solutions and private credit markets. Looking forward, Goldman Sachs is optimistic about the potential for increased M&A and IPO activity in 2025.Goldman Sachs Group Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Goldman Sachs Appoints McClure and Waldron to Board
Positive
Feb 26, 2025
On February 26, 2025, Goldman Sachs announced the appointment of KC McClure and John Waldron to its Board of Directors. McClure, who retired from Accenture, will join the Board’s Audit, Governance, and Risk Committees on April 1, 2025. Her extensive experience in finance and operations is expected to enhance the Board’s capabilities. Waldron, President and COO of Goldman Sachs, will provide insights into the firm’s execution priorities, although he will not serve on any committees. These appointments aim to strengthen the company’s strategic direction and long-term value creation for shareholders.
Executive/Board ChangesBusiness Operations and Strategy
Goldman Sachs Strengthens Leadership and Incentive Programs
Positive
Jan 17, 2025
On January 16, 2025, Goldman Sachs granted retention restricted stock units to CEO David Solomon and COO John Waldron to secure leadership stability and long-term shareholder value alignment. Additionally, on January 14, 2025, the firm introduced a Long Term Executive Carried Interest Incentive Program, reducing cash compensation and tying executive incentives to fund performance, to attract and retain talent amid competitive threats and support strategic growth in alternative asset management.
Business Operations and StrategyFinancial Disclosures
Goldman Sachs Reports Strong 2024 Financial Performance
Positive
Jan 15, 2025
Goldman Sachs reported strong financial results for the full year and fourth quarter of 2024, with net revenues of $53.51 billion and net earnings of $14.28 billion, marking a 16% increase in revenues compared to 2023. The firm’s strategic initiatives in Global Banking & Markets and Asset & Wealth Management led to record revenues in equities and significant growth in investment banking fees, contributing to an EPS of $40.54, the second-highest in its history. The firm’s return on equity for 2024 was 12.7%, with a book value per share increase of 7.4%.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.