The Goldman Sachs Group, Inc. GS
Verdict: Sell. Fair value $768 against a price of $948 on 6 Jan 2026, 19% below the price.
In plain words
The case for: Narrow competitive moat provides durability. Market leadership enables pricing power. Industry tailwinds with growing market.
The case against: Intense competitive pressure could compress margins. Operating Cash Flow was severely negative at -$13.21B in 2024 and -$12.59B in 2023, while Net.... The absolute value of accruals (Net Income - OCF) is extremely high, reaching $27.49B in 2024 and....
Main risks
- Extreme FCF Volatility: Annual FCF was deeply negative in 2023 (-$14.9B) and 2024 (-$15.3B). While TTM FCF has rebounded sharply to +$15.8B, this wild swing indicates high operational risk and unpredictability.
- Declining Core Profitability from 2021 Peak: The 3-year revenue CAGR is negative (-3.4%), and proxy EBIT has fallen significantly from its 2021 high. This suggests the business has struggled to sustain peak performance.
- Misleading ROIIC Figure: The calculated 3-year ROIIC of 160% is a mathematical artifact from a negative change in EBIT (-$8.1B) divided by a negative change in Invested Capital (-$5.1B). This actually represents a severe decline in profitability on a shrinking capital base, which is a significant concern, not a strength.
- Operating Cash Flow was severely negative at -$13.21B in 2024 and -$12.59B in 2023, while Net...
- The absolute value of accruals (Net Income - OCF) is extremely high, reaching $27.49B in 2024 and...
- Intense competitive environment