Goldman Sachs (GS): Assessing Valuation Following First-Ever Institutional Crypto Options Trade

Goldman Sachs Group (GS) has just made headlines by partnering with DBS to execute the first over-the-counter cryptocurrency options trade between banks. This step highlights growing institutional demand for digital assets and further establishes Goldman's reputation as an industry innovator.

See our latest analysis for Goldman Sachs Group.

Goldman’s recent momentum owes as much to its industry-first crypto derivatives trade as to its ambitious corporate bond offerings and persistent deal-making activity. The share price is up more than 37% year-to-date, while the one-year total shareholder return stands out at over 55%. This signals strong performance well ahead of most peers and points to building investor confidence for the long haul.

If you’re interested in what else the market’s top financial innovators are doing, it’s worth broadening your search and exploring fast growing stocks with high insider ownership

With shares trading just below analyst targets and an impressive 55% return over the past year, investors are now asking whether Goldman Sachs is still undervalued or if the market has already priced in another leg of growth.

Most Popular Narrative: 1.5% Undervalued

Goldman Sachs Group's current fair value is set at $801.58, slightly above the latest closing price of $789.37. The market is nearly in agreement with this assessment, positioning shares close to consensus fair value, which keeps sentiment balanced and expectations focused on execution.

Record growth and momentum in Asset & Wealth Management, including strong fee-based net inflows for 30 consecutive quarters and rising demand for alternative assets from high-net-worth and institutional clients, are shifting the revenue mix toward less volatile, high-margin streams. This is supporting higher and more durable net margins.

Read the complete narrative.

Just how stable is this premium? There’s a key financial indicator driving this valuation, connected to steady fee growth and robust margin expansion. What big assumptions are underpinning the market’s comfort with today’s price? Uncover the forecasted shifts that justify a price aligned with advanced wealth management leaders.

Result: Fair Value of $801.58 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, regulatory changes or heightened geopolitical tensions could put pressure on Goldman's earnings momentum and challenge its current valuation outlook.

Find out about the key risks to this Goldman Sachs Group narrative.

Another View: Testing the Valuation from a Different Angle

While most eyes are on the fair value estimate, it is worth noting how Goldman Sachs trades using a standard price-to-earnings ratio. At 15.7x, this is not only below the US market average (18.2x), but also much lower than the Capital Markets industry (24x) and even further below peer averages (36.5x). Comparatively, the fair ratio suggests the market could eventually pull GS’s multiple closer to 19.3x. This introduces both opportunity and risk depending on where investor sentiment turns next. Does this comparably low ratio point to an overlooked value, or is it a reflection of specific challenges ahead?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Goldman Sachs Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 840 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Goldman Sachs Group Narrative

If you see things differently or want to dig into the numbers yourself, you can build a personalized view in just a few minutes: Do it your way.

A great starting point for your Goldman Sachs Group research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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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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