The Goldman Sachs Group, Inc.GSNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

⚠️Model Warnings

•Perpetuity method produces negative equity value (debt exceeds enterprise value). This suggests distress or model limitations.

DCF Valuation Summary

Strong Sell

Fair Value: $-240.84 per share(market-calibrated)

-127.9%

Upside to Fair Value

Current

$861.70

Pure Model

$-608.36

Fair Value

$-240.84

Bull Case

$-693.71

Bear Case

$-565.60

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

Unreachable

Calibrated Growth

75/25 blend

Market price implies assumptions beyond model range. Fair value blends 75% model / 25% market price.

What's Driving This Ratingfor GS

↓

CapEx normalizing toward maintenance

Historical CapEx is 2.38% of revenue (heavy investment phase). Model fades this to 1.50% by Year 10, freeing up ~$729M in annual FCF. This is the biggest driver of long-term cash flow improvement.

↑

Margin expansion modeled

Current EBIT margin is 20.27% — below the sector mature average of 28.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $21.5B (25.97% margin).

→

Moderate revenue growth

Analyst consensus projects -48.98% revenue growth, fading to 2.50% by Year 10. Revenue reaches $82.8B (vs $125.1B today).

⚠

Market price exceeds model's maximum

Even with the most optimistic terminal growth the model allows, it can't reach $861.70. The market is pricing in factors beyond the DCF framework — possibly optionality, brand premium, or expectations of margin/growth inflection not yet in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 72.37% indicates efficient cash generation. FCF reaches $16.9B by Year 10 (20.41% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.31

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)10.40%

Cost of Debt

Pre-tax Cost of Debt7.41%

Tax Rate21.40%

After-tax Cost of Debt5.82%

Equity Weight (E/V)30.33%

Debt Weight (D/V)69.67%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (30.33% × 10.40%) + (69.67% × 5.82%)

= 7.21%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$63.8B	$68.1B	$73.2B	$76.9B	$82.8B
EBIT	$12.9B	$13.8B	$16.0B	$18.5B	$21.5B
Tax	$2.8B	$3.0B	$3.4B	$4.0B	$4.6B
NOPAT	$10.2B	$10.8B	$12.6B	$14.5B	$16.9B
+ Depreciation	$1.4B	$1.5B	$1.6B	$1.7B	$1.8B
- Capex	$1.5B	$1.5B	$1.5B	$1.4B	$1.2B
- Δ NWC	-$18.4B	$378M	$536M	$563M	$606M
Free Cash Flow	$28.4B	$10.5B	$12.2B	$14.3B	$16.9B
Discount Factor	0.933	0.811	0.706	0.614	0.498
Present Value	$26.5B	$8.5B	$8.6B	$8.8B	$8.4B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$16.9B

Terminal Growth Rate2.50%

WACC7.21%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$367.7B

PV of Terminal Value$183.3B

Exit Multiple Method

Year 10 EBITDA$23.4B

Exit Multiple (EV/EBITDA)12.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$280.2B

PV of Terminal Value$139.7B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$103.3B

PV of Terminal Value$183.3B

Enterprise Value$286.6B

(-) Net Debt$455.0B

Equity Value-$168.4B

Shares Outstanding313M

Price per Share$-538.66

Exit Multiple Method

PV of Projected FCFs$103.3B

PV of Terminal Value$139.7B

Enterprise Value$243.0B

(-) Net Debt$455.0B

Equity Value-$212.0B

Shares Outstanding313M

Price per Share$-678.05

Pure Model Fair Value

$-608.36

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
5.21%	$-379.01	$-307.25	$-209.03	$-66.39	$-17.08
6.21%	$-545.63	$-506.05	$-455.79	$-389.89	$-299.68
7.21%	$-662.02	$-637.76	$-608.36	$-571.97	$-525.78
8.21%	$-749.62	$-733.68	$-714.97	$-692.65	$-665.61
9.21%	$-818.88	$-807.88	$-795.25	$-780.59	$-763.35

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$-565.60

-165.6% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.64

Base Case

$-608.36

-170.6% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 1.31

Bull Case

$-693.71

-180.5% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 1.11

Key Assumptions & Drivers• Financial Services Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-48.98%

Year 3 Revenue Growth1.89%

Year 5 Revenue Growth2.50%

Year 7 Revenue Growth2.50%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin20.27%

Terminal EBIT Margin28.00%

Tax Rate21.40%

Historical Capex / Rev2.38%

Terminal Capex / Rev1.50%

NWC / Revenue30.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 12x EV/EBITDA (Financial Services sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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