- Wondering whether Goldman Sachs Group shares still offer value after a strong run, or if most of the upside is already reflected in the price.
- The stock last closed at US$864.15, with returns of 2.1% over 7 days, 5.2% over 30 days, a 5.5% decline year to date, and 90.8% over 1 year, alongside 184.1% over 3 years and 197.4% over 5 years.
- Recent headlines around Goldman Sachs Group have focused on its role in capital markets activity, its position in global banking, and how investors are treating large financial institutions in the current rate backdrop. These themes help explain why the share price has seen periods of renewed interest as well as short term pullbacks.
- Simply Wall St currently gives Goldman Sachs Group a value score of 4 out of 6. The rest of this article will break down what that score means across different valuation methods, before finishing with a way to think about value that goes beyond any single model.
Approach 1: Goldman Sachs Group Excess Returns Analysis
The Excess Returns model evaluates how much profit Goldman Sachs Group generates on its equity compared with the return investors require, then capitalizes that difference into an estimated per share value.
For Goldman Sachs Group, book value is US$356.47 per share, with a stable book value estimate of US$403.80 per share based on weighted future book value estimates from 13 analysts. Stable EPS is US$67.76 per share, sourced from weighted future return on equity estimates from 14 analysts. The average return on equity is 16.78%.
The model assumes a cost of equity of US$37.18 per share, which implies an excess return of US$30.58 per share. When these excess returns are projected forward and discounted, Simply Wall St calculates an Excess Returns intrinsic value estimate of US$931.24 per share.
Compared with the recent share price of US$864.15, this suggests the stock is around 7.2% undervalued, which represents a relatively small gap that could close through price movements or changes in fundamentals.
Result: ABOUT RIGHT
Goldman Sachs Group is fairly valued according to our Excess Returns, but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.
Approach 2: Goldman Sachs Group Price vs Earnings
For a profitable company like Goldman Sachs Group, the P/E ratio is a useful way to link what you pay for each share to the earnings that support it. It helps you see how much the market is willing to pay for each dollar of current earnings.
What counts as a “normal” or “fair” P/E depends on how the market views the company’s growth prospects and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while lower growth expectations or higher risk often point to a lower multiple.
Goldman Sachs Group currently trades on a P/E of 16.31x. That sits below both the Capital Markets industry average P/E of 37.28x and a peer group average of 24.97x. Simply Wall St’s Fair Ratio for Goldman Sachs Group is 18.09x, which is its proprietary view of what the P/E “should” be given factors such as earnings growth, profit margins, industry, market cap and specific risks.
This Fair Ratio goes further than a simple comparison with peers or the broader industry because it adjusts for company specific characteristics rather than assuming all firms deserve similar multiples. Comparing the Fair Ratio of 18.09x with the current P/E of 16.31x points to the shares being somewhat undervalued on this metric.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Goldman Sachs Group Narrative
Earlier it was mentioned that there is an even better way to understand valuation, and Narratives are that tool, letting you attach a clear story about Goldman Sachs Group's future to concrete numbers like fair value, revenue, earnings and margins. You can then compare that Fair Value with the current price to help decide whether it looks more like a buy, hold or sell for your own plan, all inside Simply Wall St's Community page where Narratives are updated automatically as fresh news or earnings arrive. One investor might build a more optimistic Goldman Sachs Group Narrative around a Fair Value of about US$1,100 that leans on stronger advisory and asset and wealth management trends, while another might anchor a more cautious Narrative closer to US$500 that leans on fee pressure and regulatory costs. Both are valid as long as the story, the forecast and the fair value are consistent with each other.
For Goldman Sachs Group, however, we will make it really easy for you with previews of two leading Goldman Sachs Group Narratives:
🐂 Goldman Sachs Group Bull Case
Fair value in this bullish Narrative: US$945.45 per share
Gap to that fair value versus the last close of US$864.15: about 8.6% below the Narrative fair value
Analyst revenue growth assumption used in this Narrative: 4.50% a year
- Leans on steady revenue growth in advisory, investment banking, and asset and wealth management, supported by ongoing client demand and fee based inflows.
- Builds in efficiency gains from AI and digital tools that are expected to support margins and allow more flexible use of capital.
- Assumes buybacks and dividend payments continue to support earnings per share and help justify the analyst consensus fair value of US$945.45.
🐻 Goldman Sachs Group Bear Case
Fair value in this cautious Narrative: US$726.27 per share
Gap to that fair value versus the last close of US$864.15: about 19.0% above the Narrative fair value
Analyst revenue growth assumption used in this Narrative: 1.83% a year
- Focuses on pressure from digital competitors, fee compression, and regulation that could weigh on margins across banking, trading, and wealth management.
- Highlights that slower expected revenue growth and more volatile deal activity could limit the reliability of earnings over time.
- Builds in a lower P/E multiple and more modest long term assumptions, which together point to a fair value of about US$726.27 in this scenario.
If you want to see the full context behind these stories, including detailed assumptions, charts, and risk checks, the Community Narratives section on Simply Wall St lays everything out side by side so you can decide which version of Goldman Sachs Group lines up better with your own view of the stock.
To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Goldman Sachs Group on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.
Do you think there's more to the story for Goldman Sachs Group? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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