Is Goldman Sachs Still a Bargain After 41% Rally and Wealth Management Expansion?

• Wondering if Goldman Sachs Group is a steal or overpriced in today’s market? You’re not alone. This stock has caught the eye of many value-seeking investors lately.
• Goldman’s stock price has surged, with an impressive 41.0% gain year-to-date and a 36.8% return over the last year. This trend hints at renewed optimism around its future prospects.
• Several headlines have helped drive momentum, including Goldman’s bold expansion into wealth management and recent leadership shakeups that signal the firm’s intent to innovate and adapt. Investors are taking note, seeing these moves as catalysts for future growth.
• The current valuation score for Goldman Sachs Group is 3 out of 6, meaning the company appears undervalued in half of our key checks. Let’s dive into how we arrive at that number using different valuation approaches, and stick around for an even smarter way to think about value at the end.

Goldman Sachs Group delivered 36.8% returns over the last year. See how this stacks up to the rest of the Capital Markets industry.

Approach 1: Goldman Sachs Group Excess Returns Analysis

The Excess Returns valuation model estimates a company's intrinsic value by assessing its return on invested capital above the required cost of equity. Essentially, it looks at how efficiently Goldman Sachs Group puts shareholder money to work compared to the minimum rate investors expect for the risk they take on. This approach helps investors judge whether the company’s future growth and profitability justify its current stock price.

For Goldman Sachs Group, the key metrics are as follows:

• Book Value: $348.02 per share
• Stable EPS: $58.61 per share (Source: Weighted future Return on Equity estimates from 13 analysts.)
• Cost of Equity: $48.19 per share
• Excess Return: $10.43 per share
• Average Return on Equity: 15.20%
• Stable Book Value: $385.48 per share (Source: Weighted future Book Value estimates from 14 analysts.)

Based on these figures, the model estimates an intrinsic value that is below the current market price. The Excess Returns analysis indicates that the stock is 62.7% overvalued compared to its intrinsic value, suggesting that the current share price may be stretched.

Result: OVERVALUED

Our Excess Returns analysis suggests Goldman Sachs Group may be overvalued by 62.7%. Discover 923 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Goldman Sachs Group.

Approach 2: Goldman Sachs Group Price vs Earnings

The price-to-earnings (PE) ratio is a time-tested valuation tool for profitable companies like Goldman Sachs Group. This metric shows how much investors are willing to pay for each dollar of the company’s earnings, making it especially relevant for established businesses delivering reliable profits year after year.

What is considered a "fair" PE ratio depends largely on growth expectations and risk. Companies with faster earnings growth or lower perceived risk can generally justify higher PE ratios. Conversely, slower-growing or riskier firms tend to command lower multiples.

Currently, Goldman Sachs Group trades at a PE ratio of 16.1x. This is below both the Capital Markets industry average of 23.8x and the peer group average of 29.9x, suggesting the market is applying a more conservative outlook to Goldman’s earnings. However, our proprietary Fair Ratio—a metric developed by Simply Wall St—takes a more nuanced approach. The Fair Ratio for Goldman Sachs Group is 19.0x, reflecting not just growth and industry trends, but also factors like profit margins, the company’s size, and its risk profile.

Unlike simple comparisons to industry or peers, the Fair Ratio is designed to capture the full picture. It accounts for Goldman’s unique combination of earnings quality, business model, and risk. This provides a more tailored sense of what multiple is genuinely appropriate for this business right now.

With Goldman’s current PE ratio just below the Fair Ratio, the difference is slight. This suggests the stock's price is in line with expectations based on its fundamentals.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1443 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Goldman Sachs Group Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your perspective—your story—about a company, brought to life by connecting your view on its future with the numbers that drive financial forecasts and, ultimately, fair value.

Instead of just crunching stats, Narratives let you share why you think Goldman Sachs Group will succeed or struggle, by laying out your assumptions on revenue, profit margins, and risk. You can then see how that story compares with the current price. This approach bridges the gap between financial analysis and real-world context, helping you connect what you know about Goldman’s strategic moves, leadership changes, or market opportunities directly to your investment decisions.

Narratives are available to everyone on the Simply Wall St platform within the Community page, making them an easy and accessible tool used by millions of investors. They update dynamically as fresh news or earnings roll in, so your assessment always stays relevant.

For example, one Goldman Sachs Group Narrative might lean bullish, expecting AI-driven efficiency and record asset management inflows to deliver a fair value of $815 per share. Another might take a more cautious view, focusing on regulatory and competitive risks and estimating fair value around $538. This empowers you to decide when to buy or sell Goldman, based on which Narrative best matches your own outlook and the current price.

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.

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