• Wondering if Goldman Sachs Group at US$1,035.64 is still offering value after a strong run, or if most of the opportunity is already priced in.
• The stock is down 5.2% over the past week, up 9.5% over the past month, up 13.3% year to date and up 69.0% over the past year. This naturally raises questions about both growth potential and changing risk perceptions.
• Recent coverage has focused on how a long stretch of strong returns, including a gain of very large magnitude over three years and 223.4% over five years, has pushed Goldman Sachs Group into the spotlight for investors reassessing big financial stocks. Commentary has also highlighted how these moves have drawn attention to whether current prices line up with underlying fundamentals.
• Simply Wall St's valuation checks give Goldman Sachs Group a value score of 3 out of 6. Next comes a breakdown of what different valuation methods say about the stock, and why a broader framework at the end of this article can be even more useful for judging fair value over time.

Approach 1: Goldman Sachs Group Excess Returns Analysis

The Excess Returns model looks at how much profit a company is expected to earn on its equity above the return that shareholders require, then converts those extra profits into an estimate of intrinsic value per share.

For Goldman Sachs Group, book value is estimated at $356.27 per share, with a stable book value projection of $389.60 per share, based on weighted future book value estimates from 12 analysts. Stable EPS is put at $66.03 per share, sourced from weighted future return on equity estimates from 15 analysts. The average return on equity is 16.95%, while the cost of equity is $35.88 per share, implying an excess return of $30.16 per share.

Using these inputs, the Excess Returns model indicates an intrinsic value of about $921.55 per share. Compared with the current share price of $1,035.64, this framework suggests the stock is around 12.4% more expensive than the model’s estimate of fair value, so it screens as overvalued on this approach.

Result: OVERVALUED

Our Excess Returns analysis suggests Goldman Sachs Group may be overvalued by 12.4%. Discover 46 high quality undervalued stocks or create your own screener to find better value opportunities.

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 relate what you pay for the stock to the earnings it is currently generating. It gives a quick sense of how many dollars investors are willing to pay today for each dollar of 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 support a higher P/E, while slower growth or higher risk usually points to a lower P/E.

Goldman Sachs Group currently trades on a P/E of 18.61x. That sits below the Capital Markets industry average P/E of 39.52x and below the peer average of 29.54x. Simply Wall St’s Fair Ratio for the stock is 19.51x, which is a proprietary estimate of the P/E that might be expected given factors such as earnings growth, industry, profit margins, market cap and risk profile.

The Fair Ratio is more tailored than a simple comparison with peers or industry averages because it adjusts for company specific characteristics rather than assuming all firms in the group deserve similar multiples. With a Fair Ratio of 19.51x versus the current 18.61x, Goldman Sachs Group appears slightly undervalued on this approach.

Result: UNDERVALUED

Wall Street's queuing for one rocket. While SpaceX counts down to its IPO, other companies tied to the new space race are already in orbit. → 20 Compelling Space Companies watchlist · Global Space Race Investing Ideas screener · Scan the sector by valuation on Rocket Lab's valuation page.

Upgrade Your Decision Making: Choose your Goldman Sachs Group Narrative

Earlier it was mentioned that there is an even better way to understand valuation, so this is where Narratives come in. Narratives provide a simple way for you to attach a clear story about Goldman Sachs Group to the numbers such as your fair value, revenue, earnings and margin assumptions, then compare that story driven fair value to the current price to decide whether the stock looks attractive or stretched.

A Narrative links three pieces together: what you think is happening in the business, how that translates into a financial forecast, and what fair value that forecast implies. On Simply Wall St this is packaged as an accessible tool on the Community page that is already used by millions of investors.

Because Narratives are updated automatically when new data such as earnings, regulatory filings or news arrives, you can see in real time how a more optimistic Goldman Sachs Group view with a fair value around US$1,050 and a more cautious view with a fair value near US$744 sit alongside a consensus view around US$934. You can then decide which story you believe and how that compares to the live share price.

For Goldman Sachs Group, here are previews of two leading Goldman Sachs Group narratives to make comparison easier:

The first is a bullish view that emphasizes AI, wealth growth and digital platforms. The second is a more measured take that is closer to consensus and focuses on steady compounding and capital returns.

Here is how they compare so you can decide which story feels closer to your own view of the stock.

Fair value in this bullish narrative: US$1,050.00

Difference between this fair value and the latest close of US$1,035.64: about 1.4% below the bullish fair value.

Revenue growth assumption: 6.67% per year.

• AI driven automation and digital platforms are expected to keep costs in check and support wider margins than the market is currently assuming.
• Asset and wealth management, especially alternatives, sit at the core of the story as a long run source of recurring, fee based revenue.
• The thesis relies on meaningful progress in capital efficiency and regulatory recalibration, which would allow more flexibility for reinvestment and capital returns.

Fair value in this more conservative narrative: US$934.19

Difference between this fair value and the latest close of US$1,035.64: about 10.9% above the consensus fair value.

Revenue growth assumption: 3.23% per year.

• Advisory, financing and asset management are expected to support steadier earnings, but with more modest growth and tighter valuation assumptions than the bullish view.
• AI and digital tools are still part of the story, with a stronger focus on incremental efficiency and controlled expense growth rather than a step change in profitability.
• Risks around regulation, fee pressure and competition for talent remain front of mind, which keeps the implied valuation multiple more restrained.

If you want to go beyond these snapshots and see how the full community is weighing up risks, growth and valuation for Goldman Sachs Group, you can review the complete narrative set and compare your own expectations to what other investors are modelling for 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.