Goldman Sachs Group Inc (GS) receives a strong valuation score of 97 from InvestorsObserver's analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. GS holds a better value than 97% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.
Metrics Analysis
GS has a trailing twelve month Price to Earnings (PE) ratio of 15.3. The historical average of roughly 15 shows a average value for GS stock as investors are paying fair share prices relative to the company's earnings. GS's average trailing PE ratio shows that the firm has been trading around its fair market value recently. Its trailing 12-month earnings per share (EPS) of 17.33 justifies the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings.
GS's 12-month-forward PE to Growth (PEG) ratio of 0.93 is considered a roughly average value as the market is valuing GS right in line with its projected earnings growth. GS's PEG comes from its forward price to earnings ratio being divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and share price. Due to their incorporation of more fundamentals of a company's overall health and focusing on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.
Summary
GS' has a adequate valuation at its current share price on account of a fairly valued PEG ratio despite strong growth. GS's PE and PEG are around the market average leading to a average valuation score.
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