GS - The Goldman Sachs Group, Inc.
| Previous Close | 199.98 |
| Open | 202.74 |
| Bid | 200.82 x 1300 |
| Ask | 0.00 x 1100 |
| Day's Range | 200.17 - 203.02 |
| 52 Week Range | 151.70 - 245.08 |
| Volume | 1,133,918 |
| Avg. Volume | 2,296,781 |
| Market Cap | 72.157B |
| Beta (3Y Monthly) | 1.31 |
| PE Ratio (TTM) | 8.41 |
| EPS (TTM) | 23.86 |
| Earnings Date | Oct 15, 2019 |
| Forward Dividend & Yield | 5.00 (2.50%) |
| Ex-Dividend Date | 2019-08-29 |
| 1y Target Est | 237.82 |
- Financial Times
Elliott, Fortress and the tangle over a Japanese property developer
The importance of all this, says someone that is closely involved, has to do with the digestion of the Japanese market. The resulting flabbiness is what consistently limits any serious bull run on the Japanese market to a couple of years at best.
- Bloomberg
Tokyo’s King of the Hills to Eclipse Roppongi With Mega Project
(Bloomberg) -- Tokyo is about to get another mound of capitalism.Mori Building Co. is spending 580 billion yen ($5.4 billion) on a new, 20-acre hub of commerce in the city’s core. Similar in size to New York’s Rockefeller Center, the complex will have shops, restaurants, 213,900 square meters of office space, 1,400 residences, a world-class hotel, an international school and the city’s biggest food court.If this capital of 14 million has a king of the hills, it’s the Mori real-estate empire. The new project will eclipse the builder’s signature development, Roppongi Hills — home to Google and Goldman Sachs Group Inc. offices, and a magnet for shoppers and international visitors. The closely held company, whose late founder was once the country’s richest man, is betting that more people — especially foreigners — will flock to live and work in Tokyo over the coming years.“This is going to become Tokyo’s newest landmark,” said Shingo Tsuji, Mori’s chief executive officer. “We’ve spent 30 years thinking about this project, and how cities should be created.”Set to open in 2023, Mori’s new endeavor doesn’t yet have a name. For now, it’s called the Toranomon-Azabudai project, from the neighborhoods Mori will gobble up in Minato-ku, one of Tokyo’s toniest enclaves. Starting with the 1986 debut of nearby Ark Hills, the real-estate developer has been relentless in its push to transform Tokyo’s skyline with hefty buildings clad in steel and glass.Mori’s properties often cater to foreign businesses and visitors, offering sanctuaries for them to stay, work and shop in a megalopolis that can be difficult to navigate. Signage and restaurant menus in the city still often lack English or other languages. Green spaces are still few and far between, and the view from the 52nd floor of Roppongi Hills betrays a sea of drab, gray low-rise homes and buildings that stretch to the horizon.Mori’s goal is to create a city within a city that people can “escape to, rather than flee from.” Ground broke this month on the big new project, which will connect two subway stations and create a new arterial road to relieve the development’s impact on vehicle traffic. Although the total footprint will be smaller than its predecessor, the new complex will have more floor space, with a 64-story main tower and two residential towers.When Mori embarked on its Roppongi project almost two decades ago, developers were jumping over each other to put up new buildings in Tokyo. Land prices were down 75% after Japan’s economic bubble burst in the early 1990s, interest rates were on their way to zero and new zoning laws made it easier to combine lots for big projects.That bet may have paid off, Mori’s new project is getting underway under a different scenario, coming after a long run-up in office space demand. Tokyo’s real-estate market is thriving, with vacancy rates near record lows below 3%, according to Colliers International Group Inc., the real-estate investment and services firm.The big question is whether that trend will continue, as well as Mori’s ability to keep riding the wave of mega projects. Although rental growth has been robust, Colliers predicts it will peak at around the current 5% before easing to an average of 0.8% over the next few years. All told, central Tokyo will have 70 major real-estate projects breaking ground from 2018 through 2023, according to the firm.“The office market is doing really well, vacancies are coming down,” said Patrick Wong, a Bloomberg Intelligence analyst. “The issue is whether rents can keep going up further.”Tokyo isn’t the only frothy real-estate market in the region. Singapore and Sydney are also seeing low office-leasing vacancies as companies hire more people. Last month, the government of Singapore clamped down on speculative buying and selling, with the central bank citing “euphoria” in the property market.At the same time, protests in Hong Kong have put the brakes on demand for central office space in China’s special administrative region. Spooked investors are turning elsewhere to places such as Singapore, which saw private home sales surge a sequential 43.5% in July. Although no multinational corporations have said they’re leaving Hong Kong, it’s probably on their mind, according to Wong. “This could be an opportunity for Tokyo,” he said.That’s music to the ears of Japanese Prime Minister Shinzo Abe, who in 2014 pushed to establish new strategic special zones in Tokyo and other cities as part of his Abenomics revitalization plan. The areas of Tokyo that fall under those zones, which offer deregulation and other incentives, are right where Mori has been developing properties for decades.No surprise, then, that the Toranomon-Azabudai mega project has been 30 years in the making. Work on it started even before Roppongi Hills. For its major projects, Mori’s employees spend years going door to door, persuading local residents and property owners to hand over their land in exchange for prime residential space in the new buildings.It’s hardly a coincidence that Mori’s suffix for its biggest developments — there’s also Toranomon Hills and Atago Green Hills — harks back to that other chichi neighborhood, Beverly Hills. It’s also a nod to the Japanese word, Yamanote. Transliterated as “the hill’s hand,” the term refers to the more desirable, hilly neighborhoods west of the Imperial Palace in feudal Tokyo that now include Mori’s properties.“We’ve poured everything we’ve learned from our Hills projects into this new development,” Tsuji said.Mori’s ultimate vision is to link up all of its properties into an uber-complex of offices, homes and retail space. Although the developer is going to unveil the project’s name just before it opens for business, odds favor it will end with “Hills.”(Updates with timing of naming in last paragraph. A previous version of this story corrected the timeframe of projects.)\--With assistance from Hiromi Horie.To contact the reporter on this story: Reed Stevenson in Tokyo at rstevenson15@bloomberg.netTo contact the editors responsible for this story: Emma O'Brien at eobrien6@bloomberg.net, Reed Stevenson, Jeff SutherlandFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Markets Should Be Worried About the Music Stopping
(Bloomberg Opinion) -- Several factors are roiling world markets right now, from fears of a possible U.S. recession to erratic policymaking, trade tensions and general uncertainty. But the unusual size of the moves -- regularly on the order of 1% to 3% -- is being heightened by something else: the struggle to find someone with whom to trade. The decline in trading liquidity is evident in several metrics. Volumes have declined. Since 2007, average daily trading in U.S. Treasury bonds (measured as a percentage of market size) has fallen by over 60%. Trading in traditionally less liquid corporate and high-yield bonds has shrunk by similar amounts. The number of small trades (under $1 million) has grown, suggesting a lack of partners for larger deals.Over the same period, U.S. equity market turnover has also shrunk. The Goldman Sachs Group Inc. estimates that in 2018, by some measures, single-stock liquidity fell 30% to 40%. Other telling indications include significant intra-day moves, frequent price spikes, higher volatility of bid-offer spreads and the proliferation of flash crashes such as the sharp increase in the Cboe Volatility Index or VIX at the end of 2018 and the Japanese yen flash in January 2019.Structural changes are driving this trend. For a variety of reasons, traditional market-makers such as banks and dealers have become less active; bank trading assets have fallen from 40% of total assets in 2008 to half that figure. Regulatory changes have made trading more capital-intensive. Meanwhile, industry consolidation has reduced the number of participants. The trading inventory of government and especially corporate debt has fallen.Trading liquidity has instead become dependent on different kinds of investors. Algorithmic traders now make up around 50% of U.S. equity trading. Other providers range from pension fund and insurance companies to mutual funds, exchange-traded funds or ETFs, hedge funds and private investors. This increased role for investors may be problematic. Investment funds and algorithmic traders are not natural providers of liquidity. They channel investor money. Unlike banks, they do not have permanent capital to risk in providing liquidity or warehousing positions. Traditional market makers, such as banks, can buy or sell based on assessed true value, building inventory and waiting for market fluctuations to subside. In part, this is made possible by the greater stability of their funding and capital base.By contrast, funds are limited in their ability to make markets by adjusting prices. Their ability to buy and sell is dependent on the flows of investible funds. Large inflows necessitate buying, as most fund have limits on how much money they can keep in cash. At the same time, since most funds offer investors the chance to withdraw their money on short notice, redemptions obligate funds to sell. Where investors are leveraged, the need to meet margin calls restricts liquidity and trading activity. This further limits the ability of investors to provide market liquidity just when it’s most needed.Other investors are constrained by mandates and investment rules. ETFs, which are now a major influence, must adjust holdings to reflect the underlying benchmark, irrespective of value or price considerations. Algorithmic traders compete with central and commercial banks in chasing safe and highly liquid assets. Perversely, this diminishes liquidity for those assets. Diminished trading liquidity has several implications for investors. Their ability to trade is increasing fragile. Volumes can evaporate quickly when volatility rises, as investors turn from buyers to sellers and algorithmic traders withdraw. In effect, providers of liquidity then become users, destabilizing markets. Price discovery, which underlies all trading and valuations, becomes unreliable. The different focus of investors in the current cycle complicates matters. Investors searching for return have invested in riskier, less liquid assets. As investors in Argentina have discovered, a quick exit is sometimes impossible in emerging markets.There’s also heightened risk of investors being unable to exit “gated” funds where redemptions are suspended. The three largest U.K. property funds froze over $12 billion in assets in the aftermath of the Brexit vote. More recently, the Swiss fund manager GAM Holding AG and iconic U.K. investor Neil Woodford have blocked redemptions, as has Nataxis-owned H2O Asset Management LLP. Bank of England Governor Mark Carney has warned that investment funds that promise to allow customers to withdraw their money on a daily basis are "built on a lie."There are broader implications. Illiquidity may precipitate fire sales and large asset price moves, resulting in sudden and sharp tightening in financial conditions.In 2007, then-Citigroup Inc. head Chuck Prince made an ill-fated comparison to investing as a game of musical chairs: You kept dancing while the music played. The problem, as traders are rediscovering, is finding a chair when the music stops. Investors are underestimating and under-pricing the risks diminished market liquidity could pose in the next downturn. To contact the author of this story: Satyajit Das at sdassydney@gmail.comTo contact the editor responsible for this story: Nisid Hajari at nhajari@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Satyajit Das is a former banker and the author, most recently, of "A Banquet of Consequences."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Zacks
Goldman Sachs (GS) Gains But Lags Market: What You Should Know
In the latest trading session, Goldman Sachs (GS) closed at $200.67, marking a +0.35% move from the previous day.
- GuruFocus.com
The Fed Has Crossed the Interest Rate Rubicon
Politics is a dangerous game for a supposedly apolitical organization to play Continue reading...
- Bloomberg
Goldman Warns Hedge Fund Outperformance Holds Crowding Risk
(Bloomberg) -- Equity hedge funds are enjoying their strongest performance since 2009 -- with the S&P 500 index up 16% this year -- but Goldman Sachs Group Inc. warns that crowding is a risk.Funds have benefited from both a rising stock market and successful stock selection, strategists including Ben Snider and David Kostin wrote in a note Aug. 20. They’ve also concentrated their holdings into a reduced number of industries, such as health care, and into single names, particularly Amazon.com. Inc. When rallies peak, too much professional money can try to get out of the same stocks simultaneously and exaggerate declines.“Funds continue to lift portfolio weights in their top positions, which are increasingly also the top positions of other funds,” the strategists wrote. “These dynamics, along with higher leverage, lower portfolio turnover, and declining market liquidity, have boosted the performance of momentum stocks while also increasing the risk funds face from crowding.”They added that this will “make funds particularly vulnerable to a potential market unwind, particularly if accompanied by the decline in liquidity that typically coincides with falling risk appetite.”Investment banks from Goldman to Morgan Stanley increasingly study the relative positioning of funds that compete with each other to beat benchmarks. The crowding issue is in focus this month, as August has seen a spike in stock and bond markets volatility. Hedge funds rushed for safety last quarter as Treasuries rallied and concerns about economic slowdown flared, regulatory filings compiled as of last week showed.Goldman found the most popular long positions had lagged the S&P 500. The favorite short positions trailed by even more. Overall, the average equity fund return in 2019 has been 9%.Alongside the success comes some concern as well, after examining the holdings of 835 hedge funds with $2.1 trillion of gross equity positions at the start of the third quarter.Goldman found a rotation continued from technology into health care, which is now the sector with the largest overweight versus the Russell 3000 Index, which like the S&P 500, is also up 16% this year. Overweights in health care and industrials are at a 10-year high, the report said. Funds trimmed positions in semiconductors and “other stocks exposed to U.S.-China trade conflict,” according to the strategists.Also, late June and July saw a sharp rise in exposures as the Federal Reserve began to cut rates and U.S.-China trade relations appeared to thaw, the strategists said. But leverage has been trimmed again in August. While the S&P 500 rose in June and July, it’s down 1.8% so far this month. Amazon.com appeared most frequently among the 10 largest holdings of funds, followed by Facebook Inc. New names on the list of the top 50 such stocks include Allergan Plc and Micron Technology Inc.(Adds S&P 500 performance in recent months in penultimate paragraph.)To contact the reporter on this story: Joanna Ossinger in Singapore at jossinger@bloomberg.netTo contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, ;Samuel Potter at spotter33@bloomberg.net, Todd White, John ViljoenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters
Goldman Sachs explores sale of auto warranty business Safe-Guard -sources
Goldman Sachs Group Inc's buyout arm is exploring the sale of Safe-Guard Products International LLC, which could value the auto warranty company at more than $1 billion, including debt, people familiar with the matter said on Wednesday. Goldman Sachs is working with advisers on an auction for Safe-Guard, though there is no certainty a deal will be reached, said the sources, who asked not to be identified because the matter is confidential. Goldman Sachs declined to comment.
- Motley Fool
5 Things You Should Know About Apple's New Credit Card
Here are the details about Apple's newest services play.
- Bloomberg
Goldman Plans Hiring Spree in Trading (Only Coders Need Apply)
(Bloomberg) -- Goldman Sachs Group Inc.’s trading division is planning its biggest hiring spree in years. The catch? The entire effort is focused on coders, a sign of where Wall Street is headed.The firm is looking to add more than 100 engineers for tech-related roles on the trading floor in the coming months, according to Adam Korn, co-head of engineering in the trading division. Goldman plans to raid its rivals in the tech and finance industries, with most of the new positions to be based in New York and London.“You are going to see us very actively in the marketplace going after this kind of talent,” Korn said. “Historically, engineers were not seen as a part of the business. That’s obviously changed.”The firm is focused on adding people who can respond to the demands of trading partners seeking to automate, Korn said.Wall Street has been in a state of upheaval for the past decade, especially involving traders who sit in between buyers and sellers of stocks and bonds. Rapid advancements in technology have fundamentally altered the way that business gets done, enabling firms to cut staff as automation takes over. Banks are responding by allocating more resources to technology.The firm’s new management under Chief Executive Officer David Solomon approved the plan earlier this year.“We walked in there with our ‘Shark Tank’-esque plan,” Korn said. “The leadership group was excited and interested and the firm is putting money where its mouth is.”Marquee HiresThe hires at Goldman will help continue the build-out of Marquee, a trading and risk-management platform that the firm hopes will translate into a meaningful business line in its trading division.Goldman has also been overhauling its electronic-trading platform to serve large quant hedge funds, with an eye toward using advancements in trading tools that could then be deployed across a larger set of business partners. Reducing trading time, processing more requests and spitting out faster responses to queries would help generate more trades and more business.Raj Mahajan, a partner at the firm, has been a key part of the initiative, helping build out the technology backing the equity-trading operations. He was recently elevated to a new role that will make him responsible for all quant client needs.The effort has been making some inroads, with the firm last quarter scooping up more than $2 billion in quarterly revenue from equities trading and narrowing the gap with Morgan Stanley, which has held the mantle of Wall Street’s top equities-trading shop in recent years.That didn’t go unnoticed.“We’ve done over $2 billion a quarter, the first and second quarters, for a while now,” Morgan Stanley Chief Financial Officer Jonathan Pruzan said after the firm released second-quarter results. “A competitor did this for the first time in a long time.”To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson, Daniel TaubFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Zacks
Warren Buffett is Buying More Bank Stocks: Should You Too?
Despite a challenging backdrop, Warren Buffett is adding bank stocks to his investment portfolio. Thus, investing in banks with strong fundamentals and prospects seem to be a wise decision.
- Financial Times
FirstFT: Today’s top stories
for a role in Saudi Aramco’s planned stock market listing after a charm offensive by top executives, including former Trump administration official Dina Powell. The Wall Street bank had failed to secure a top advisory role in 2017 when Saudi Aramco nominated banks including JPMorgan Chase, Morgan Stanley, Moelis, Evercore and HSBC for what could be the world’s largest listing. The successful launch of a $12bn international bond by Saudi Aramco this year renewed momentum for the IPO and revived optimism about the Saudi economy after the international condemnation that followed the killing of journalist Jamal Khashoggi.
- Zacks
Banks Get Respite as Regulators Okay Volcker-Rule Tailoring
Banks likely to get some respite soon, with the U.S. regulators showing the green light for easing of the Volcker Rule under the Trump administration.
- Financial Times
Goldman Sachs seeks majority stake in China joint venture
Goldman Sachs has applied to take majority control of a securities joint venture in China in a move that will bring the US investment bank closer to its goal of sole ownership of the company. China has in the past year expedited the opening of its financial sector to foreign companies, following criticism that the process has dragged on for far too long without allowing true market access. In December UBS became the first to receive the green light, with the China Securities Regulatory Commission approving its request to raise its stake in Beijing-based UBS Securities from 24.99 per cent to 51 per cent.
- Bloomberg
Berlin’s Fintech Wealth Is Attracting at Least One Private Bank
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Berlin’s vibrant startup scene is creating a new generation of wealthy entrepreneurs who are increasingly looking for advice on how to manage their money.One bank that’s trying to capitalize on that demand is locally based Weberbank. While some of Germany’s biggest private banks are forgoing the capital, the 70-year-old company aims to grow its asset under management by 10% a year by tapping into this relatively new source of business.“The number of wealthy people is rising here. We see plenty of potential,” Chief Executive Officer Klaus Siegers said in an interview. The company has no need to look beyond the city for private-banking clients, he said.Siegers acknowledged that Berlin has a relatively small number of the kind of small and mid-sized companies that have thrived in other parts of the country, enriching their owners. “However, this gap is increasingly being filled by the startup scene in the city,” Siegers said.Berlin’s fintech boom has in recent months attracted big-name investors including Goldman Sachs Group Inc. According to a study by EY, startups based in the city received a total of 2.1 billion euros ($2.3 billion) in financing in the first six months of this year alone. Salaries in the fintech industry are rising sharply, the head of Berlin-based investor Finleap said earlier this month.Old MoneyThe city’s newly rich aren’t the only reason why Siegers sees his potential customer base growing. “There are also established wealthy people who are attracted to Berlin’s art and culture and who want to relocate here. And of course, they also need a private bank in Berlin,” he said.The heads of Frankfurter Bankgesellschaft and Bankhaus Metzler recently declared Berlin unfit to house private banking locations, citing a lack of potential clients. Other companies in the industry, such as Fosun International Ltd.’s Hauck & Aufhaeuser, don’t have a presence in the city either.Since 2009, Weberbank has been owned by Mittelbrandenburgische Sparkasse. The public-sector lender bought the business from failing WestLB. Weberbank’s private-banking customers have, on average, around 2 million euros of assets, Siegers said, even though there is no set minimum to become a client. The company, which also caters to some institutional investors, has assets under management of about 6.2 billion euros and is profitable.(Quote on clients added in last paragraph)To contact the reporter on this story: Stephan Kahl in Frankfurt at skahl@bloomberg.netTo contact the editors responsible for this story: Erhard Krasny at ekrasny@bloomberg.net, Andrew BlackmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters
Goldman moves to take majority control of China joint venture
Goldman Sachs has applied for majority control of its Chinese joint venture, the bank confirmed on Wednesday, the latest international bank to do so ahead of Chinese plans to eventually allow foreigners full control. The bank submitted an application with the China Securities Regulatory Commission (CSRC) on Monday to take its stake in Goldman Sachs Gao Hua Securities to 51% - the maximum permitted - from its current 33% holding. Western banks' lack of control over the JVs, along with their limited contribution to revenues, have long been a source of frustration for foreign banks in China.
- Zacks
Blockchain Is Revolutionizing The Way We Do Business
Blockchain is one of the most revolutionary technologies of this generation and has applications that spread across every sector of our economy. The technology has applications that go way beyond a means of transferring wealth.
- Reuters
Goldman Sachs, China's Ping An back artificial intelligence firm H20.ai
Goldman Sachs Group Inc, China's Ping An Global Voyager Fund and others have invested $72.5 million in H20.ai, a rapidly growing artificial intelligence startup, the companies said on Tuesday. Founded in 2012, California-based H20.ai is a software company that aims to make it easier for companies that lack the skilled workforce or time to adapt to the rapidly changing artificial intelligence landscape, Chief Executive and founder Sri Ambati said in an interview. Customers like Capital One Financial Corp, Wells Fargo & Co, Aetna and Booking.com can use H20's platform to automate model building, feature engineering and to pull valuable insights out of large amounts of the companies' proprietary data, Ambati said.
- Reuters
Goldman CEO memo calls Apple Card 'a beginning' on launch day
Goldman Sachs Group Inc officially became a credit-card lender on Tuesday by rolling out its first product with Apple Inc, but the bank has aspirations to grow much bigger in consumer lending, its chief executive said in an internal memo viewed by Reuters. The virtual credit card, which officially launched to all U.S. customers, is Goldman's first, and it represents a big push by the Wall Street bank to build out its young consumer business. "Apple Card is big, but it's also a beginning," Goldman's CEO David Solomon wrote in an internal email to employees.
ReutersUPDATE 1-Goldman CEO memo calls Apple Card 'a beginning' on launch day
Goldman Sachs Group Inc officially became a credit-card lender on Tuesday by rolling out its first product with Apple Inc, but the bank has aspirations to grow much bigger in consumer lending, its chief executive said in an internal memo viewed by Reuters. The virtual credit card, which officially launched to all U.S. customers, is Goldman's first, and it represents a big push by the Wall Street bank to build out its young consumer business. "Apple Card is big, but it's also a beginning," Goldman's CEO David Solomon wrote in an internal email to employees.
- Reuters
On Apple Card launch day, Goldman CEO says card is "a beginning" -memo
Starting Tuesday, iPhone users can apply for the Apple Card, which charges no annual fees, through Apple's Wallet app, both companies said.
- InvestorPlace
Things Will Keep Getting Worse For Square Stock
Investors have dumped shares of Square (NYSE:SQ) since the last earnings report. And it's only going to get worse. SQ stock is in a sharp downward trend that shows no sign of letting up. All told, there's a good case for Square stock heading back to the lows around $50 a share.Source: Shutterstock The company's last earnings report was far from good. The company offered specific developments, such as the sale of Caviar to Doordash for modest consideration that really hurt Square's long-term growth narrative. And there's a lot more to be nervous about with SQ stock right now. Let's dive into the reasons why SQ stock is still a sell right now. Is Cash App Really Doing That Great?Cash App pulled in $260 million in revenue in last quarter with a rapid growth rate. At first blush, that sounds fantastic. But there's less here than meets the eye.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * Major Headlines Mean Opportunities for Smart Investors For one thing, right around half of that revenue came from Bitcoin transactions. Get rid of that, and Cash App's revenues are down to $135 million for the quarter. Who knows where Bitcoin and crypto will go from here. Maybe the recent recovery is real. Maybe not. Anyone that bet on bitcoin or crypto stocks in late 2017 got clobbered the next year. Don't bet the farm on SQ stock hoping Bitcoin revenues continue to surge.Meanwhile, the more durable main source of Cash App revenue appears to be its instant deposit feature. This, like Paypal (NASDAQ:PYPL), allows vendors to access their cash instantly for a small fee. However, this is quite uneconomic for larger users and thus is unlikely to be a major revenue growth stream forever. Also, the Fed's new real-time payment system may reduce the need for Square's service here. A Bank License May Not Be So GreatThere's also the matter that Square is still trying to get a banking license. It was previously unsuccessful but has made another attempt at regulatory approval.SQ stock bulls point to a banking license as a major catalyst that could shoot the stock back up toward last year's highs. In theory, Square as a bank could add a lot of value for its customers.But taking on the role of a bank adds a lot of headaches and red tape as well. You have to worry about compliance, capital reserves, and all the other stresses of post-financial crisis era banking. In addition, customers that currently pay for services such as instant deposit are going to expect a lower fee experience if they bank with Square as well.On top of all that, are the people bullish on Square as a bank looking at the same financial markets that the rest of us are?The big banking shares like Goldman Sachs (NYSE:GS) and Wells Fargo (NYSE:WFC) are performing quite poorly in the market this year. Goldman Sachs, in particular, with all its customer-focused new innovations such as the Apple Card is getting no respect at all. If the market is petrified of interest rates and recession risk for banks, why is it going to give Square stock huge credit for entering this out-of-favor industry? Square Stock Is Really ExpensiveA big issue for SQ stock going forward is that the company still makes hardly any money. In the past, this was easier to explain because the company was purportedly investing heavily in loss-making growth operations like Caviar that would pay off in spades later. But Caviar didn't. And with Square shedding its money-losing operations, in theory, it should look a lot more profitable going forward.And yet, it's not. Adjusted EBITDA is likely to come in around $400 million for this year. Given Square's market cap, this means investors are paying in the neighborhood of 70x EBITDA for this business. That's absolutely absurd. You can justify 20 or 25x for a fast-growing tech company with good cash flows. Square isn't that fast-growing, especially without Caviar, and its operational profile isn't that amazing either.In fact, Square should probably trade at a discount to tech peers due to the credit exposure and recession risk (since its client base is primarily smaller businesses). Instead, the market is pricing SQ stock as though it were as good as the hottest of the cloud software companies. Unless Square's business performs exceptionally well going forward, people are going to get burned here in a major way. SQ Stock VerdictI know Square stock is down a lot, and you might want to buy the dip. But there are better tech plays at this time. SQ stock was profoundly overvalued before; a 25% drop has hardly fixed the valuation issue. In addition to the above concerns, consider analyst sentiment. * 10 Mid-Cap Dividend Stocks to Buy Now You have various analysts with hold ratings or tepid sorts of recommendations for SQ stock with price targets in the $80s or higher. With the stock now under $65, analysts will need to lower their targets, particularly with growth avenues such as Caviar disappearing. I wouldn't be surprised if analyst downgrades and price targets help push Square stock back down to 52-week lows around the $50 mark.At the time of this writing, Ian Bezek owned GS and WFC stock. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Things Will Keep Getting Worse For Square Stock appeared first on InvestorPlace.
- Benzinga
Goldman Sachs Files Plans For 6 Bond ETFs
Goldman Sachs Assets Management (GSAM), the exchange traded funds arm of Goldman Sachs (NYSE: GS ), is looking to boost its profile in the fast-growing fixed income ETF space. What Happened With bond ETFs ...
- PR Newswire
H2O.ai Raises $72.5M Led by Goldman Sachs and Ping An to Democratize AI
Investment Powers H2O.ai to Transform Every Company to be an AI Company MOUNTAIN VIEW, Calif., Aug. 20, 2019 /PRNewswire/ -- H2O.ai , the open source leader in artificial intelligence and automatic machine ...
- PR Newswire
H2O.ai Empowers Every Company to be an AI Company
MOUNTAIN VIEW, Calif., Aug. 20, 2019 /PRNewswire/ -- H2O.ai, the open source leader in AI and machine learning for the enterprise, today announced the latest release of its award-winning automatic machine learning platform, H2O Driverless AI. H2O.ai also announced more than 100 open-source recipes that can be used for customization and extension of Driverless AI to empower customers to address specific nuances in their use cases and the ability to include their domain expertise in order to make their own AI. H2O.ai also is pleased to announce its next round of funding led by Goldman Sachs and Ping An.
