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Goldman Sachs shapes global finance by orchestrating complex deals and managing trillions in assets that impact economies and individual lives alike. As a powerhouse in investment banking, global markets, asset management, and wealth advisory, it has earned a reputation for innovation, quality, and market influence. With a legacy dating back over 150 years, the question remains: do Goldman Sachs’ current fundamentals support its lofty market valuation and future growth prospects?
Table of contents
Business Model & Company Overview
The Goldman Sachs Group, Inc., founded in 1869 and headquartered in New York City, stands as a dominant player in the financial capital markets sector. Its core mission revolves around delivering a cohesive ecosystem of financial services spanning investment banking, global markets, asset management, and consumer & wealth management. This integrated approach supports a diverse range of clients, including corporations, governments, and individuals worldwide.
Goldman Sachs generates value through a balanced mix of advisory, underwriting, trading, and asset management services, complemented by consumer banking offerings. Its revenue engine is powered by a strong presence across the Americas, Europe, and Asia, leveraging both recurring management fees and transactional income. The company’s economic moat is reinforced by its global reach and comprehensive service platform, shaping the future of global finance.
Financial Performance & Fundamental Metrics
In this section, I analyze The Goldman Sachs Group, Inc.’s income statement, key financial ratios, and dividend payout policy to assess its overall financial health.
Income Statement
The table below presents The Goldman Sachs Group, Inc.’s key income statement figures for the fiscal years 2021 through 2025, reported in USD.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Revenue | 65B | 69B | 108B | 127B | 125B |
| Cost of Revenue | 6.01B | 24B | 63B | 75B | 68B |
| Operating Expenses | 31.9B | 31.2B | 34.5B | 33.8B | 37.5B |
| Gross Profit | 59B | 45B | 45B | 52B | 57B |
| EBITDA | 29.1B | 16B | 16B | 21B | 22B |
| EBIT | 27B | 13.5B | 11B | 18.4B | 19.6B |
| Interest Expense | 5.65B | 21B | 62B | 73B | 67B |
| Net Income | 22B | 11B | 8.5B | 14.3B | 17.2B |
| EPS | 60.35 | 30.57 | 23.05 | 41.22 | 51.95 |
| Filing Date | 2022-02-25 | 2023-02-24 | 2024-02-28 | 2025-02-27 | 2026-01-15 |
Income Statement Evolution
Between 2021 and 2025, The Goldman Sachs Group, Inc. experienced a 92.5% increase in revenue, although revenue slightly declined by 1.38% from 2024 to 2025. Gross profit rose by 9.6% year-over-year, supporting a favorable gross margin of 45.7%. EBIT and net margin also improved, with EBIT growth at 6.68% and net margin growth at 22.0%, despite an overall net income decline of 20.6% over the period.
Is the Income Statement Favorable?
In 2025, Goldman Sachs reported revenue of $125B and net income of $17.2B, with a net margin of 13.73%, marked as favorable. EBIT margin stood at 15.69%, reflecting operating efficiency, though interest expense remained high at 53.41% of interest income, an unfavorable factor. Overall, 57% of income statement metrics are favorable, leading to a generally positive fundamental assessment for the fiscal year.
Financial Ratios
The following table presents key financial ratios for The Goldman Sachs Group, Inc. over the past five fiscal years, providing insights into profitability, valuation, liquidity, leverage, efficiency, and dividend metrics:
| Ratios | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | 33% | 16% | 8% | 11% | 14% |
| ROE | 20% | 10% | 7% | 12% | 14% |
| ROIC | 3.0% | 1.7% | 1.0% | 1.6% | 1.0% |
| P/E | 6.2 | 10.7 | 15.4 | 13.2 | 16.0 |
| P/B | 1.22 | 1.03 | 1.12 | 1.54 | 2.20 |
| Current Ratio | 0.97 | 0.89 | 0.94 | 0.93 | 1.21 |
| Quick Ratio | 0.97 | 0.89 | 0.94 | 0.93 | 1.21 |
| D/E | 4.44 | 3.71 | 4.99 | 5.06 | 4.95 |
| Debt-to-Assets | 33% | 30% | 36% | 37% | 34% |
| Interest Coverage | 4.8 | 0.63 | 0.17 | 0.25 | 0.29 |
| Asset Turnover | 0.04 | 0.05 | 0.07 | 0.08 | 0.07 |
| Fixed Asset Turnover | 3.19 | 3.57 | 8.08 | 12.7 | 3.47 |
| Dividend Yield | 2.0% | 3.0% | 3.2% | 2.4% | 1.6% |
Evolution of Financial Ratios
From 2021 to 2025, Goldman Sachs’ Return on Equity (ROE) experienced a decline, falling from 19.68% to 13.74%, indicating a slowdown in profitability. The Current Ratio improved from below 1.0 in earlier years to 1.21 in 2025, reflecting enhanced short-term liquidity. The Debt-to-Equity Ratio remained high and relatively stable, around 4.95 in 2025, signaling continued significant leverage.
Are the Financial Ratios Favorable?
In 2025, profitability ratios such as net margin (13.73%) were favorable, while ROE (13.74%) and return on invested capital (0.98%) were neutral and unfavorable, respectively. Liquidity showed mixed signals: a neutral Current Ratio (1.21) but a favorable Quick Ratio (1.21). Leverage ratios, including a high Debt-to-Equity (4.95) and low interest coverage (0.29), were unfavorable. Efficiency metrics like asset turnover (0.07) were also unfavorable, whereas fixed asset turnover (3.47) was favorable. Overall, the financial ratios were slightly unfavorable.
Shareholder Return Policy
The Goldman Sachs Group, Inc. maintains a consistent dividend policy with a payout ratio around 25-49% over recent years and a dividend yield near 1.6%. Dividend per share has steadily increased from $7.77 in 2021 to $14 in 2025. The company also engages in share buybacks, supporting shareholder returns alongside dividends.
Despite facing leverage and coverage constraints, the dividend payments appear covered by net income, suggesting a balanced distribution approach. The combination of dividends and buybacks indicates a commitment to shareholder returns, aligning with sustainable long-term value creation given current profitability levels.
Score analysis
The following radar chart presents a comprehensive view of the key financial scores for The Goldman Sachs Group, Inc.:
The company’s scores reveal moderate performance in discounted cash flow (3) and return on assets (3), with a favorable return on equity score (4). However, debt to equity (1) and price to book (1) scores are very unfavorable, indicating areas of financial concern, while the price to earnings score remains moderate (2).
Analysis of the company’s bankruptcy risk
The Altman Z-Score places the company in the distress zone, signaling a high probability of financial distress and potential bankruptcy risk:
Is the company in good financial health?
The Piotroski Score diagram provides insight into the company’s financial strength based on nine key criteria:
With a Piotroski Score of 7, the company demonstrates strong financial health, suggesting solid fundamentals despite other financial challenges.
Competitive Landscape & Sector Positioning
This sector analysis will examine The Goldman Sachs Group, Inc.’s strategic positioning, revenue segments, key products, and main competitors. I will assess whether Goldman Sachs holds a competitive advantage within the financial services industry.
Strategic Positioning
The Goldman Sachs Group, Inc. maintains a diversified product portfolio across Investment Management, Global Markets, and Platform Solutions, with FY 2024 revenues of $16B, $35B, and $2.4B respectively. Geographically, it generates significant revenue in the Americas ($34B), EMEA ($12B), and Asia ($6.8B), reflecting broad international exposure.
Revenue by Segment
This pie chart illustrates The Goldman Sachs Group, Inc.’s revenue distribution by segment for the fiscal year 2024, highlighting key business areas and their contributions.
In 2024, Global Markets led with $34.9B, followed by Investment Management at $16.1B, and Platform Solutions with $2.4B. The dominance of Global Markets shows a focus on trading and market-making activities, while Investment Management steadily grew, indicating a strong asset management presence. Platform Solutions, though smaller, showed slight growth, suggesting emerging diversification. The concentration in these segments underscores potential risk if market conditions shift unfavorably.
Key Products & Brands
The Goldman Sachs Group, Inc. operates through several key financial service segments detailed below:
| Product | Description |
|---|---|
| Investment Banking | Provides financial advisory services, underwriting equity and debt securities, middle-market lending, acquisition financing, and transaction banking. |
| Global Markets | Engages in client execution activities for cash and derivative instruments, credit and interest rate products, equity financing, and related services across mortgages, currencies, commodities, and equities. |
| Investment Management | Manages assets across equity, fixed income, hedge funds, credit funds, private equity, real estate, currencies, and commodities; offers customized investment advisory solutions. |
| Consumer & Wealth Management | Offers wealth advisory, financial planning, investment management, deposit taking, lending, private banking, unsecured loans, and savings products. |
| Platform Solutions | Provides technology-driven solutions and services, contributing to revenue alongside core segments. |
Goldman Sachs’ revenue is primarily driven by Investment Management and Global Markets, reflecting its diversified financial services platform across advisory, trading, asset management, and consumer finance.
Main Competitors
There are 6 competitors in total, with the table below listing the top 6 leaders by market capitalization:
| Competitor | Market Cap. |
|---|---|
| Morgan Stanley | 289B |
| The Goldman Sachs Group, Inc. | 287B |
| The Charles Schwab Corporation | 185B |
| Robinhood Markets, Inc. | 102B |
| Raymond James Financial, Inc. | 33B |
| Hut 8 Corp. | 5B |
The Goldman Sachs Group, Inc. ranks 2nd among its competitors, with a market cap at 96.22% of the top player, Morgan Stanley. It stands above both the average market cap of the top 10 (150B) and the median market cap in the sector (143B). The company is 3.93% below Morgan Stanley, showing a narrow gap with the leader, and 50.56% above its closest competitor below.
Comparisons with competitors
Check out how we compare the company to its competitors:
Does GS have a competitive advantage?
The Goldman Sachs Group, Inc. does not currently present a competitive advantage, as its return on invested capital (ROIC) is significantly below its weighted average cost of capital (WACC), indicating value destruction and declining profitability over the 2021-2025 period. The company’s financial performance shows mixed signals with favorable margins but an overall unfavorable trend in profitability and ROIC.
Looking ahead, Goldman Sachs operates across diverse financial segments including Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management, with revenues distributed globally, especially in the Americas. Its broad service offering and established market presence provide opportunities to leverage new products and expand into emerging markets, which could influence its future competitive positioning.
SWOT Analysis
This SWOT analysis highlights key internal and external factors affecting The Goldman Sachs Group, Inc., to guide strategic investment decisions.
Strengths
- Strong brand and market presence
- Diversified financial services portfolio
- Favorable net margin and operating profit growth
Weaknesses
- High interest expense ratio
- Declining ROIC and value destruction
- Moderate debt-to-equity concerns
Opportunities
- Expansion in emerging markets
- Growth in asset management and consumer wealth segments
- Technological innovation in financial services
Threats
- Regulatory and compliance risks
- Market volatility and economic downturns
- Intense competition in capital markets
The analysis reveals that Goldman Sachs benefits from strong brand equity and profitable operations but faces challenges with cost management and capital efficiency. Strategic focus on innovation and market expansion is critical to offset competitive and regulatory pressures.
Stock Price Action Analysis
The following weekly chart illustrates the price movement and volatility of The Goldman Sachs Group, Inc. (GS) stock over the past 100 weeks:
Trend Analysis
Over the past 100 weeks, GS stock price increased by 136.76%, indicating a strong bullish trend with clear acceleration. The price ranged from a low of 386.99 to a high of 962.0, supported by high volatility as reflected in a standard deviation of 147.51. Recent weeks confirm continued upward momentum with a 16.86% rise.
Volume Analysis
Trading volume totals 1.3B shares, with buyers accounting for 64.12%, showing a buyer-driven market overall. However, volume is decreasing, suggesting a reduction in market participation despite strong buying dominance in the recent period, where buyers represent 75.22% of activity, signaling sustained investor interest.
Target Prices
The consensus target prices for The Goldman Sachs Group, Inc. suggest a moderately optimistic outlook among analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 1100 | 604 | 902.83 |
Analysts expect Goldman Sachs’ stock to trade between 604 and 1100, with a consensus target near 903, indicating potential upside balanced by some downside risk.
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Analyst & Consumer Opinions
This section reviews recent analyst ratings and consumer feedback regarding The Goldman Sachs Group, Inc. (GS).
Stock Grades
Here is the latest summary of stock grades from recognized financial institutions for The Goldman Sachs Group, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Sector Perform | 2026-01-20 |
| Wells Fargo | Maintain | Overweight | 2026-01-16 |
| Keefe, Bruyette & Woods | Maintain | Market Perform | 2026-01-16 |
| JP Morgan | Maintain | Neutral | 2026-01-08 |
| Barclays | Maintain | Overweight | 2026-01-05 |
The overall trend shows a predominance of hold or neutral ratings with some overweight assessments, indicating a cautious but generally stable outlook among major analysts during early 2026. Notably, no strong buy or sell recommendations are present in recent updates.
Consumer Opinions
Consumer sentiment about The Goldman Sachs Group, Inc. (GS) reveals a mix of trust in its financial expertise and concerns over customer service.
| Positive Reviews | Negative Reviews |
|---|---|
| “Goldman Sachs offers unparalleled market insights and reliable investment advice.” | “Customer support can be slow and unresponsive at times.” |
| “Strong digital platform with robust security features.” | “High fees compared to some competitors.” |
| “Professionalism and expertise clearly stand out in wealth management.” | “Some investment products are complex and not well explained.” |
Overall, consumers appreciate Goldman Sachs for its expertise and security, but recurring issues include customer service responsiveness and fee structures.
Risk Analysis
Below is a summary table highlighting key risk categories for The Goldman Sachs Group, Inc., including their probability and potential impact:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Financial Health | Low Altman Z-score (0.28) indicates high bankruptcy risk, signaling financial distress. | High | High |
| Leverage Risk | Very unfavorable debt-to-equity ratio (4.95), increasing vulnerability to interest rate hikes. | High | High |
| Market Volatility | Beta of 1.32 suggests above-average stock price volatility compared to the market. | Moderate | Moderate |
| Profitability | Unfavorable ROIC (0.98%) and interest coverage (0.29) raise concerns about operational efficiency. | Moderate | Moderate |
| Regulatory Risk | Operating in financial services exposes the company to stringent regulations and compliance costs. | Moderate | Moderate |
The most critical risks stem from Goldman Sachs’ financial distress indicators, notably the distress zone Altman Z-score and very unfavorable leverage measures. These factors demand cautious monitoring, especially given the current challenging macroeconomic environment affecting the financial sector.
Should You Buy The Goldman Sachs Group, Inc.?
The Goldman Sachs Group, Inc. appears to be grappling with a deteriorating competitive moat, as indicated by declining ROIC and value destruction. While profitability shows moderate improvement, the firm’s leverage profile remains substantial, reflected in a cautious B- rating, suggesting a complex risk-reward balance.
Strength & Efficiency Pillars
The Goldman Sachs Group, Inc. exhibits solid profitability, with a net margin of 13.73% and a return on equity (ROE) of 13.74%, indicating moderate efficiency in generating shareholder returns. Its Piotroski score of 7 reflects strong financial health, signaling robust fundamentals. However, a low return on invested capital (ROIC) of 0.98% falls below the weighted average cost of capital (WACC) at 9.08%, highlighting that the company is not currently a value creator. Financial distress risks are notable, given an Altman Z-score of 0.28, placing it deep in the distress zone.
Weaknesses and Drawbacks
Investors should be cautious due to significant leverage concerns, as evidenced by a debt-to-equity ratio of 4.95, marked very unfavorable, and an interest coverage ratio of 0.29, which implies difficulties in servicing debt obligations. Valuation metrics remain neutral with a P/E of 16.0 and P/B of 2.2, offering neither a bargain nor an expensive premium. The distressed Altman Z-score and declining ROIC trend indicate ongoing value destruction. These factors, combined with a moderate revenue decline of -1.38% over the past year, pose material risks to near-term financial stability.
Our Verdict about The Goldman Sachs Group, Inc.
The long-term fundamental profile appears unfavorable due to financial distress indicators and value destruction signals. However, the bullish overall stock trend and recent strong buyer dominance (75.22%) might suggest a potential for recovery. Despite the company’s challenges, the current market momentum could present selective opportunities, though a cautious, wait-and-see stance might be prudent before committing to a position.
Disclaimer: This content is for informational purposes only and does not constitute financial, investment, or other professional advice. Investing in financial markets involves a significant risk of loss, and past performance is not indicative of future results.
Additional Resources
- Goldman Sachs Group’s (NYSE:GS) five-year total shareholder returns outpace the underlying earnings growth – Yahoo Finance (Jan 24, 2026)
- The Goldman Sachs Group, Inc. $GS Shares Bought by UniSuper Management Pty Ltd – MarketBeat (Jan 24, 2026)
- Goldman Sachs Boosts CEO Solomon’s Pay 21% to $47 Million – Bloomberg.com (Jan 23, 2026)
- Form 424B2 GOLDMAN SACHS GROUP INC – StreetInsider (Jan 23, 2026)
- Don’t Ignore The Insider Selling In Goldman Sachs Group – simplywall.st (Jan 22, 2026)
For more information about The Goldman Sachs Group, Inc., please visit the official website: goldmansachs.com
