For most investors, how much a stock’s price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you’d invested in Goldman Sachs (GS) ten years ago? It may not have been easy to hold on to GS for all that time, but if you did, how much would your investment be worth today?
With that in mind, let’s take a look at Goldman Sachs’ main business drivers.
Founded in 1869, The Goldman Sachs Group, Inc. is a leading global financial holding company providing IB, securities, investment management, and consumer banking services to a diversified client base. The company is headquartered in New York, with offices in major financial centers globally.
Goldman provides its services through the following broad segments:
The Global Banking and Markets segment (constitutes 67.4% of net revenues as of Sept. 30, 2024) generates revenues from IB fees, including advisory, and equity and debt underwriting fees, Fixed Income, Currency and Commodities (FICC) intermediation and financing activities and Equities intermediation and financing activities. The segment also includes relationship lending and acquisition financing (and related hedges) and investing activities related to its Global Banking & Markets activities.
The Asset and Wealth Management segment (29.6%) generates revenues from management and other fees, incentive fees, equity investments and debt investments, as well as private banking and lending.
The Platform Solutions segment (3%) generates revenues from consumer platforms, and transaction banking and other platform businesses.
In 2023, Goldman completed the divestiture of its Personal Financial Management unit to Creative Planning, resulting in a gain of $349 million.
In 2022, the company acquired robo-advisor, NextCapital and Dutch asset manager, NN Investment Partners from NN Group N.V. The company also closed the acquisition of GreenSky in an all-stock transaction. In 2020 and 2019, Goldman completed its purchase of Folio Financial and United Capital, respectively.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Goldman Sachs, if you bought shares a decade ago, you’re likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in December 2014 would be worth $3,153.08, or a 215.31% gain, as of December 4, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500’s rally of 191.65% and gold’s return of 110.50% over the same time frame.
Looking ahead, analysts are expecting more upside for GS.
Shares of Goldman have underperformed the industry in the past three months. Its third-quarter 2024 results reflected a rise in provisions and a weak capital position. Its global banking & markets division will likely be under pressure due to the volatile nature of capital markets. The constant efforts to narrow focus on the consumer business will likely hurt the company’s top line in the near term. Given the current geopolitical concerns, high dependence on overseas revenues remains a woe. Yet, its refocus on the core strengths of IB and trading businesses through restructuring initiatives and strategic buyouts will boost its presence in overseas markets. Improvement in global deal-making and underwriting activities and its leading position will likely aid IB’s revenue growth. A decent liquidity position will aid capital distribution.
Over the past four weeks, shares have rallied 14.26%, and there have been 8 higher earnings estimate revisions in the past two months for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.
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The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
Source: finance.yahoo.com
