Goldman Sachs Stock (GS): Is It A Good Buy?

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The Goldman Sachs Group, Inc is a world-renowned investment management, banking and securities firm that offers a wide array of financial services to a diverse and substantial client base.

The company has three business lines: principal investments and trading, investment banking, securities services and asset management. Goldman Sachs has institutional clients, such as banks, corporations, asset managers, hedge funds, endowments and governments.

Since it has extensive clientele across the world, Goldman Sachs is considered one of the most successful investment banks in the world. It is also involved in many global projects and initiatives. But does that mean the Goldman Sachs stock is worth buying?

This guide discusses whether the stock is worth purchasing and what investors must consider before investing in it.

Goldman Sachs Stock Current Price

The current price of the Goldman Sachs stock is $403.05. It has a market cap of about $134.45 billion and a one-year estimated target price of $459.62.

Just two business days ago, the stock’s price closed at $3997.77, with a 0.23% decline in price from the previous days. Around this time, S&P 500’s daily loss amounted to around 0.1%, while Nasdaq was around 0.47% .

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Goldman Sachs is expected to release its next earnings report on Jan 18, 2022. The report will show whether the company can meet analysts’ expectations of $12.13 per share. Its projected the value will show a yearly growth of 0.41% for the company. The Zacks Consensus Estimate reports the company’s revenue to be $119.3 billion, which is 1.59% higher than last year.

However, there are still a few days before Goldman Sachs reveals this report. Thus, investors should look out for any upcoming estimates by analysts.

Is Goldman Sachs A Good Buy?

Although the stock price of Goldman Sachs dipped a few days ago, it has returned to its original price since then. This indicates that Goldman Sachs is worth buying at the moment.

But that’s not the only reason to invest in Goldman Sachs stock.

Zacks Ranking System

Zacks Rank System is a system that shows rankings of stocks of any stock exchange. It has a percentile rank for every stock it ranks. The higher the percentile of a specific stock, the better it is. The rank system also goes from 1 to 5, with 1 being the strongest “Buy” and 5 being the strongest “Sell.”

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Zacks Rank System has a strong record of performing well. Thus, its ranking is considered a benchmark against which investors can make decisions. The ranking system also shows the future of the Goldman Sachs Stock and tells you how good it is compared to other stocks in its industry.

P/E Ratio

P/E ratio refers to the Price-to-Earnings Ratio, and it tells investors how much they should pay for a stock based on its current earnings per share. A low P/E ratio suggests that the company is undervalued and vice versa.

Goldman Sachs has a PE Ratio of 6.56, which is considered low. Most investors consider it good to buy shares in companies with a low P/E ratio because you’re paying less for every dollar you receive in earning from that stock.

Think of a lower P/E ratio like a low price tag — you’re getting a good deal at a lower price. However, it’s important to understand that companies’ stocks are sometimes undervalued due to poor performance.

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However, this is not true for Goldman Sachs. The company is doing well, which means you can rely on the P/E ratio to invest in Goldman Sachs stock.

EPS

The EPS is the earning per stock, which is calculated by dividing a company’s profits by the total number of shares of its common stock.

A higher EPS means that the company’s profits potentially may have significantly increased. This is good news for investors because it means they will receive more dividends if they purchase stocks of that company. The rating goes from 1 to 99, with 99 being the best score.

Goldman Sachs has an EPS of 60.63, which may not be high compared to its competitors but is still good enough for you to invest in it.

PEG Ratio

The PEG ratio is similar to the P/E ratio. The only difference between the two is that the PEG ratio also accounts for the expected earnings growth rate of the company.

It shows the ratio of a stock’s price to its earnings per share, or EPS. The lower this number is, the better off you are as an investor. The ratio ranges from 0 to 1. A PEG ratio higher than 1 means the stock is overvalued, which isn’t good news for an investor. Meanwhile, a ratio lower than 1 means the stock is undervalued and a good buy.

Goldman Sachs stock has a PEG ratio of 0.88, indicating that the stock is undervalued now. That means it’s a good buy.

Final Take

To sum up, Goldman Sachs stock is a strong investment, considering it has favorable ratios, and the company is also on the right path in terms of earnings and plans for the new year.

Additionally, the Zacks Rank System has also rated Goldman Sachs stock as a Buy. All signs point to it being a good investment, especially for people interested in investing in the Fixed Income Clearing Corporation industry.

Remember that this analysis is based solely on numbers, so it’s always important to do your own research before investing in any stock.

Good To Know

Goldman Sachs stock’s current ratios indicate the stock is worth buying. However, investors should wait for the company to release its earnings reports before making any big investment decisions.

Data is accurate as of Jan. 11, 2022, and subject to change.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

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About the Author

Scott Jeffries is a seasoned technology professional based in Florida. He writes on the topics of business, technology, digital marketing and personal finance. After earning his bachelor’s in Management Information Systems with a minor in Business, Scott spent 15 years working in technology. He's helped startups to Fortune 100 companies bring software products to life. When he's not writing or building software, Scott can be found reading or spending time outside with his kids.
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