Is It The Right Time To Buy The Goldman Sachs Group Inc (GS)?
The Goldman Sachs Group Inc (NYSE:GS) received a lot of attention from a substantial price movement on the NYSE in the over the last few months, increasing to $246.88 at one point, and dropping to the lows of $215.84. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether GS’s current trading price of $236.43 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at GS’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Goldman Sachs Group
What’s the opportunity in GS?
According to my valuation model, the stock is currently overvalued by about 63%, trading at $236.43 compared to my intrinsic value of $144.96. This means that the opportunity to buy GS at a good price has disappeared! But, is there another opportunity to buy low in the future? Since GS’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much GS moves relative to the rest of the market.
What does the future of GS look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at GS future expectations. Though in the case of GS, it is expected to deliver a negative earnings growth of -0.43%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? If you believe GS is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the uncertainty from negative growth in the future, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on GS for some time, now may not be the best time to enter into the stock. Its price has risen beyond its true value, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?
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 GS 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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.