The Goldman Sachs Group (NYSE:GS) recently reported its third-quarter results and beat estimates. The stock ranks fifth on our list of the top 10 common stock picks of billionaire Ken Fisher and Jim Cramer. The results were strong, so is the stock a buy after the report? Let’s analyze.
Third-Quarter Results
Goldman has beaten earnings estimates in each of the last four quarters. Management said net revenues were the second highest in the firm’s history. Return on common equity was 18.7%. Equities revenue rose 72% from a year earlier, and asset and wealth management revenue rose 10% from the second quarter. Even so, the stock traded flat after the report. Goldman also invests its own money, and its 13F filing earlier this year showed it added to Micron and Amazon in the second quarter. See the full breakdown.
Bull Case
Goldman has a steadier earnings base than it used to, so a slow stretch in dealmaking hurts less. Management said on the earnings call that durable revenues have more than doubled since its 2020 investor day and made up about 45% of revenue so far this year. These are revenues such as management fees and financing, which do not swing as much as trading and deal fees. Goldman also keeps a strong position in the work that drives its biggest fees. Carillon Eagle Growth & Income Fund said in its investor letter that Goldman has one of the strongest M&A advisory businesses in the world and that more deals and public offerings lift its results. Check the full letter here. If deal activity keeps recovering, Goldman has a large and growing base of steady income to build on.
Bear Case
Goldman’s results still depend on capital markets, and those can turn quickly. Trading revenue dipped from the prior quarter in the third quarter. Dealmaking was also uneven across the industry, since JPMorgan and Wells Fargo both reported weaker investment banking in the same season. Growth is also set to slow. Analysts expect earnings per share to grow about 39% in 2026 and only about 4% in 2027. They expect sales growth of about 25% in 2026 and about 1.4% in 2027. After a year like this one, the next year has a hard comparison. Wall Street’s consensus rating on the stock is Hold, and a quant score also rates it Hold.
Valuation
Goldman trades at about 12.3 times forward earnings. The typical stock in its sector trades at about 10.8 times, so Goldman carries a premium of about 14%. Goldman’s own five-year average is about 12.5 times, so the stock sits about where it usually does. Growth explains why investors pay more than the sector. Analysts expect earnings per share to grow about 39% in 2026. The forward PEG ratio, which divides the P/E by expected growth, is 0.80 against a sector median of 1.03, so Goldman costs less per point of growth than the typical stock in its sector. Next year looks different. Analysts expect earnings growth to slow to about 4% in 2027, and at that pace the stock would look much more expensive on the same measure.
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