The Goldman Sachs Group

Bearish/Neutral

Ticker: GS · https://www.goldmansachs.com

Executive Summary

Investors may question how The Goldman Sachs Group will manage its financial health amid significant challenges in cash flow and working capital management. The firm's recent performance indicates a tightening cash position, with operating cash flow remaining negative at -$45.15 billion and an increased cash conversion cycle. These factors raise concerns about its ability to meet short-term obligations and sustain operational efficiency.

Additionally, the macroeconomic environment poses further risks. Rising inflation, currently at 3.3 percent year over year, and elevated interest rates could dampen demand for loans, adversely affecting profitability and credit quality. While the firm has made strides in regulatory compliance, ongoing scrutiny may lead to additional costs and operational constraints, complicating its competitive landscape.

Given these factors, the outlook for The Goldman Sachs Group appears precarious, with potential headwinds overshadowing any recent regulatory improvements or earnings growth recognition. Investors should approach with caution, as the firm navigates a challenging environment that could impact its financial stability. The verdict is Bearish/Neutral.

Next reported earnings: Monday, 13 April 2026, before market open.

Key Metrics

Market Cap	$269.39 B	i
6-Month Share Price Change	18.77%	i
Revenue (TTM)	$125.10 B	i
EBITDA (TTM)	$24.03 B	i
EPS (TTM)	$54.93	i
Operating Cash Flow (TTM)	($45.15 B)	i
Free Cash Flow (TTM)	($47.22 B)	i
Cash and cash equivalents	$164.26 B	i
P/E Ratio (TTM)	16.53	i
Price/Book (TTM)	2.27	i
Debt/Equity	4.88	i
Current Ratio	0.83	i
Dividend Yield (TTM)	1.71%	i

Tap or click the i icon for a metric definition.

The Goldman Sachs Group Story

Founded in 1869 and headquartered in New York City, The Goldman Sachs Group has evolved from a small commercial paper business into a global leader in investment banking, securities, and investment management. The firm initially focused on serving businesses and individuals in need of capital, but it quickly expanded its offerings to include underwriting and advisory services.

Major milestones include the firm’s initial public offering in 1999, which marked its transition into a publicly traded company, and its pivotal role during the financial crisis of 2008, when it became a bank holding company to gain access to federal support. This shift allowed Goldman Sachs to stabilize its operations and adapt to a rapidly changing financial landscape.

In recent years, the firm has made significant investments in technology and digital banking, reflecting a broader trend in the industry. Goldman Sachs launched Marcus, its online consumer banking platform, in 2016, aiming to diversify its revenue streams beyond traditional investment banking. This move has positioned the firm to capture a growing segment of retail banking customers.

Today, Goldman Sachs continues to navigate challenges and opportunities in the financial sector, balancing its legacy of high-stakes investment banking with a commitment to innovation and customer service.

Macro Industry Position

The Financial - Capital Markets industry addresses the critical need for businesses and individuals to access capital and manage financial risks. This sector encompasses a range of services, including investment banking, trading, and asset management. Major players include global leader JPMorgan Chase, regional challenger Charles Schwab, and adjacent substitute BlackRock, which offers investment management services. These firms compete to provide innovative solutions that meet the evolving demands of clients in a complex financial environment.

The Goldman Sachs Group relies on a diverse array of inputs, including market conditions, regulatory frameworks, and technological advancements, to deliver its investment banking and asset management services. The firm competes with other financial giants like Morgan Stanley and Bank of America, while also facing pressure from fintech companies that offer alternative financial solutions. As Goldman Sachs continues to invest in technology and digital banking, it aims to enhance its service offerings and maintain its competitive edge in a rapidly changing market.

The current macro environment presents both challenges and opportunities for the Financial - Capital Markets industry. Rising inflation and shifting growth expectations can impact credit quality and lending growth, which are vital for firms like The Goldman Sachs Group. Additionally, the shape of the yield curve and asset valuations influence fee structures and overall profitability. As consumer prices remain elevated, the pressure on margins may intensify, prompting firms to adapt their strategies to sustain performance amid these economic conditions.

Consumer budgets, whether household or corporate, are under pressure from rising prices, with US inflation at 3.3 % year over year. This economic backdrop influences the Federal Reserve's policy rate, currently at 3.64 %, which remains unchanged. Euro-area inflation is notably lower at 1.9 % year over year, while the European Central Bank's deposit rate stands at 2.00 %, also unchanged. These dynamics affect lending growth and credit quality, crucial for The Goldman Sachs Group's operations. Additionally, the US 10-year yield is at 4.29 %, reflecting market expectations and influencing asset valuations across the sector.

Bottom line: The Goldman Sachs Group operates in a challenging environment where inflation and interest rates directly impact consumer spending and lending dynamics. With the Fed maintaining its policy rate, the firm must navigate these pressures while adapting to the competitive landscape shaped by both traditional financial institutions and emerging fintech solutions.

Recent Developments

On April 10, 2026, The Goldman Sachs Group (GS) cleared a significant regulatory hurdle as the Federal Reserve ended its 2018 foreign exchange enforcement action against the firm. This conclusion followed years of compliance upgrades and strengthened controls implemented by Goldman Sachs. The resolution of this enforcement action is expected to enhance the firm's operational flexibility and reputation in the financial markets ^[1]^[2].

On April 10, 2026, Zacks Investment Research highlighted Goldman Sachs as a stock to watch due to its earnings growth and price strength. The report indicated that the firm was included in the Zacks Focus List, which aims to assist investors in identifying top-rated stocks for building a successful investment portfolio. This recognition may attract more investor interest in Goldman Sachs shares ^[3].

On April 8, 2026, Goldman Sachs Asset Management published its Market Pulse report for April, providing insights into market trends and investment strategies. The report aimed to inform investors about current market conditions and potential opportunities. Specific details regarding the content of the report were not disclosed ^[4].

For investors, these updates suggest a positive shift in Goldman Sachs' regulatory standing and market perception. The conclusion of the enforcement action may lead to increased investor confidence, while the firm's recognition for earnings growth could enhance its attractiveness as an investment option. Overall, these developments may indicate a favorable environment for Goldman Sachs moving forward ^[5]^[6].

Sources

[1] GS Clears Regulatory Hurdle as Fed Ends 2018 FX Enforcement Action - Zacks Investment Research (Apr 10, 2026)
[2] GS Clears Regulatory Hurdle as Fed Ends 2018 FX Enforcement Action (Apr 10, 2026)
[3] Earnings Growth & Price Strength Make Goldman Sachs (GS) a Stock to Watch (Apr 10, 2026)
[4] Market Pulse April - Goldman Sachs Asset Management (Apr 8, 2026)
[5] A Look At Goldman Sachs (GS) Valuation As Shares Rebound And Appear Slightly Undervalued - simplywall.st (Apr 11, 2026)
[6] GOLDMAN SACHS GROUP Q1 2026 Earnings Preview: Recent $GS Insider Trading, Hedge Fund Activity, and More - Quiver Quantitative (Apr 10, 2026)

Financial Deep-Dive

Welcome to the Financial Deep-Dive. The eight tabs below organise The Goldman Sachs Group's financial data into valuation, profitability, per-share data, leverage, liquidity, efficiency, working-capital, and R&D. Each tab presents financial metrics and trend charts for its category, along with key strengths and weaknesses. Click on any measure for a clear definition and insight into its relevance for investors. At the bottom, you'll find a detailed Financial Health Summary outlining The Goldman Sachs Group's financial condition based on their most recent accounts.

Valuation and Market Multiples

Market capitalization: $269.39 B (status: green)
Price-to-earnings ratio: 16.53 (status: green)
Price-to-sales ratio: 2.15 (status: green)
Price-to-book ratio: 2.27 (status: amber)
Enterprise-value/EBITDA multiple: 29.74 (status: red)
EV-to-operating-cash-flow: -15.83 (status: red)
EV-to-free-cash-flow: -15.14 (status: red)
Earnings yield: 6.05% (status: green)

Profitability Ratios

Net profit margin: decreased over the period (status: red)
Return on equity (ROE): increased over the period (status: green)
Operating profit margin: decreased over the period (status: red)
Gross profit margin: decreased over the period (status: red)
Return on assets (ROA): increased over the period (status: green)
Return on capital employed (ROCE): increased over the period (status: green)
Pretax profit margin: decreased over the period (status: red)
Return on invested capital (ROIC): increased over the period (status: green)
Income quality: decreased over the period (status: red)
Return on tangible assets: increased over the period (status: green)

Per-Share and Key Metrics

Earnings per share (EPS): $54.93 (status: green)
Revenue per share: increased over the period (status: green)
Operating cash flow per share: increased over the period (status: green)
Free cash flow per share: increased over the period (status: green)
Cash per share: $1,997.21 (status: green)
Book value per share: $399.65 (status: green)
Tangible book value per share: $377.94 (status: green)
Interest-bearing debt per share: $1,956.20 (status: red)
Payout ratio: 30.72% (status: green)
Dividend per share: $15.50 (status: green)
Dividend yield: 1.71% (status: green)

Leverage and Coverage Ratios

Debt-to-equity ratio: 4.88 (status: red)
Debt ratio: 0.34 (status: green)
Interest coverage: 0.33 (status: red)
Total debt to capitalization: 0.83 (status: red)
Long-term debt to capitalization: 0.70 (status: red)
Cash-flow-to-debt ratio: -0.07 (status: red)

Liquidity Ratios

Cash and cash equivalents: $164.26 B (status: green)
Current ratio: 0.83 (status: red)
Quick ratio: 0.83 (status: red)
Cash ratio: 0.13 (status: red)

Activity and Efficiency Ratios

Asset turnover: increased over the period (status: green)
Receivables turnover: decreased over the period (status: red)
Inventory turnover: remained flat over the period (status: red)
Payables turnover: increased over the period (status: green)
Fixed-asset turnover: increased over the period (status: green)
Operating cash flow-to-sales ratio: decreased over the period (status: red)
Free cash flow-to-operating cash flow ratio: increased over the period (status: green)

Working-Capital and Cycle Metrics

Cash conversion cycle: increased over the period (status: red)
Days of sales outstanding: decreased over the period (status: green)
Days of inventory outstanding: remained flat over the period (status: red)
Days of payables outstanding: increased over the period (status: green)
Operating cycle: decreased over the period (status: green)

Capital-Intensity and R&D

R&D expense-to-revenue ratio: remained flat over the period (status: red)
Capital expenditure-to-revenue ratio: decreased over the period (status: green)
Capex-to-operating-cash-flow ratio: decreased over the period (status: green)
Capex per share: increased over the period (status: red)
Capex-to-depreciation ratio: decreased over the period (status: green)
Stock-based compensation-to-revenue ratio: decreased over the period (status: green)

Financial Health Summary

For fiscal year 2025, The Goldman Sachs Group reported revenue of $125.10 billion, a slight decline from $126.85 billion in fiscal year 2024. EBITDA for the same period increased to $24.03 billion, up from $20.79 billion the previous year. In the latest quarter, the firm generated revenue of $30.13 billion and EBITDA of $6.38 billion, while operating cash flow remained negative at -$45.15 billion.

The firm's market capitalization stands at $269.39 billion, with a price-to-earnings ratio of 16.53 and a price-to-sales ratio of 2.15. These figures indicate a relatively attractive valuation compared to industry peers. However, the enterprise-value-to-EBITDA multiple is high at 29.74, suggesting potential concerns about profitability. While The Goldman Sachs Group maintains a solid cash position of $164.26 billion, liquidity ratios such as the current and quick ratios, both at 0.83, highlight challenges in meeting short-term obligations.

Cash flow per share has come under pressure, declining significantly over the reporting period. The cash conversion cycle has increased, indicating that the firm is tying up more days in working capital, which could hinder operational efficiency. Days of payables outstanding decreased, suggesting that suppliers are being paid faster, but this may further strain cash flow. Overall, these trends point to a tightening cash position that could impact future operations.

Verdict: The Goldman Sachs Group faces notable challenges with cash flow and working capital management. While the firm shows strength in revenue and EBITDA growth, the increasing cash conversion cycle and declining cash flow per share raise concerns about its financial health moving forward.

Risks and Concerns

The Goldman Sachs Group operates in a financial landscape increasingly influenced by rising inflation, currently at 3.3 percent year over year. This economic pressure can affect consumer spending and lending dynamics, which are crucial for the firm's profitability. As the Federal Reserve maintains its policy rate at 3.64 percent, the cost of borrowing remains elevated, potentially dampening demand for loans and impacting credit quality across the board.

Moreover, the firm's operational flexibility may be tested as it navigates ongoing regulatory challenges. Although Goldman Sachs recently cleared a significant regulatory hurdle with the Federal Reserve ending its 2018 foreign exchange enforcement action, the firm must remain vigilant. Regulatory scrutiny can impose additional compliance costs and operational constraints, which could hinder its ability to compete effectively in a rapidly evolving market.

For shareholders, the tightening cash position is particularly concerning. Despite reporting revenue of $125.10 billion for fiscal year 2025, the firm has seen a decline in cash flow per share and an increase in its cash conversion cycle. These trends suggest that Goldman Sachs may struggle to maintain its operational efficiency and profitability in the face of rising costs and competitive pressures, raising questions about its long-term financial health and attractiveness as an investment.

Outlook

The Goldman Sachs Group is poised to face a complex landscape as it navigates the pressures of rising inflation and interest rates. While the firm has made strides in diversifying its revenue streams through technology investments and its online banking platform, Marcus, the current economic environment poses significant challenges. Elevated consumer prices and a steady Federal Reserve policy rate could dampen lending growth, impacting profitability. Investors should closely monitor how Goldman Sachs adapts its strategies to maintain its competitive edge amid these pressures.

Recent developments, such as the resolution of regulatory challenges, may bolster investor confidence. The conclusion of the Federal Reserve's enforcement action against Goldman Sachs enhances its operational flexibility and reputation. Additionally, recognition for earnings growth could attract further interest in the firm's stock. However, ongoing economic conditions will remain a critical factor. Investors should watch for updates on lending dynamics and any shifts in regulatory frameworks that could influence Goldman Sachs' performance in the coming quarters.

Red & Green Flags

This section distills all of the report's positives (green flags), negatives (red flags) and open questions (unknowns) into one place. The Overall view reflects a read of the evidence across the full report; it is not a simple tally of the lists below.

Green Flags

Goldman Sachs has a market capitalization of $269.39 billion, indicating a strong market presence.
The firm has a price-to-earnings ratio of 16.53, suggesting an attractive valuation compared to peers.
Earnings per share (EPS) stands at $54.93, reflecting solid profitability.
Revenue per share has increased over the period, indicating growth.
Operating cash flow per share has also increased, showing improved cash generation.
Goldman Sachs has a strong cash position with $164.26 billion in cash and cash equivalents.
The firm cleared a significant regulatory hurdle with the Federal Reserve ending its 2018 foreign exchange enforcement action.
Goldman Sachs was highlighted as a stock to watch due to its earnings growth and price strength.
Return on equity (ROE) and return on assets (ROA) have increased, indicating improved efficiency.
The firm has diversified its revenue streams through technology investments and its online banking platform, Marcus.

Red Flags

The enterprise-value-to-EBITDA multiple is high at 29.74, raising concerns about profitability.
Operating cash flow remained negative at -$45.15 billion, indicating cash flow challenges.
Liquidity ratios such as the current and quick ratios are both at 0.83, highlighting difficulties in meeting short-term obligations.
The cash conversion cycle has increased, suggesting inefficiencies in working capital management.
Net profit margin, operating profit margin, and gross profit margin have all decreased over the period.
The firm's debt-to-equity ratio is high at 4.88, indicating significant leverage.
Interest coverage is low at 0.33, suggesting challenges in covering interest expenses.

Unknowns

The specific content of Goldman Sachs' Market Pulse report for April was not disclosed.
The impact of ongoing regulatory scrutiny on operational flexibility and costs remains uncertain.
Future lending dynamics and shifts in regulatory frameworks that could influence performance are not clearly defined.

10 green flags, 7 red flags, 3 unknowns.

Overall view: Bearish/Neutral.

Why this view:

The firm faces significant challenges with cash flow and working capital management, raising concerns about its financial health.
Rising inflation and interest rates could dampen demand for loans, impacting profitability and credit quality.
Despite recent regulatory improvements, ongoing scrutiny may impose additional compliance costs and operational constraints.

Action Checklist

Below are the next research steps a retail investor should consider based on this report.

Examine the recent financial health summary for The Goldman Sachs Group, focusing on revenue trends and EBITDA performance to assess overall profitability.
Investigate the implications of the Federal Reserve's conclusion of the 2018 foreign exchange enforcement action on Goldman Sachs' operational flexibility and market reputation.
Analyze the firm's liquidity ratios, particularly the current and quick ratios, to understand its ability to meet short-term obligations amid tightening cash flow.
Review the Zacks Investment Research report that highlights Goldman Sachs as a stock to watch, paying attention to the factors contributing to its earnings growth and price strength.
Monitor the competitive landscape, especially the impact of fintech companies on Goldman Sachs' market position and its ongoing investments in technology and digital banking.

Disclaimer

This Company Report is based on publicly available information and original research, and is provided for informational purposes only. It does not constitute financial, investment, or legal advice, nor an offer or solicitation to buy or sell any security. Readers should conduct their own due diligence and consult qualified advisors before making any investment decisions. Company performance can change rapidly and past results are not a guarantee of future outcomes. The author and publisher accept no responsibility for any actions taken based on this report.