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Is Goldman Sachs (GS) a Great Value Stock Right Now?

Zacks Equity Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Goldman Sachs (GS) is a stock many investors are watching right now. GS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 8.93, while its industry has an average P/E of 10.49. Over the past 52 weeks, GS's Forward P/E has been as high as 9.33 and as low as 6.21, with a median of 8.23.

Investors should also note that GS holds a PEG ratio of 0.74. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. GS's PEG compares to its industry's average PEG of 1.25. Within the past year, GS's PEG has been as high as 1.35 and as low as 0.51, with a median of 0.76.

Investors should also recognize that GS has a P/B ratio of 0.99. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.10. Over the past 12 months, GS's P/B has been as high as 1.19 and as low as 0.77, with a median of 0.93.

Finally, our model also underscores that GS has a P/CF ratio of 7.39. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. GS's P/CF compares to its industry's average P/CF of 18.74. Within the past 12 months, GS's P/CF has been as high as 13.58 and as low as 5.45, with a median of 6.88.

These are only a few of the key metrics included in Goldman Sachs's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, GS looks like an impressive value stock at the moment.


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