The Goldman Sachs Group, Inc. (NYSE:GS) saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Goldman Sachs Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Is Goldman Sachs Group still cheap?
Great news for investors – Goldman Sachs Group is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $290.39, but it is currently trading at US$220 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Goldman Sachs Group’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Goldman Sachs Group generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a negative profit growth of -8.2% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Goldman Sachs Group. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although GS is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to GS, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on GS for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Goldman Sachs Group. You can find everything you need to know about Goldman Sachs Group in the latest infographic research report. If you are no longer interested in Goldman Sachs Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.