The Goldman Sachs Group, Inc.GSNYSE

Overview Intelligence Charts News Fundamentals DCF 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: $-238.49 per share(market-calibrated)

-126.0%

Upside to Fair Value

Current

$916.04

Pure Model

$-623.34

Fair Value

$-238.49

Bull Case

$-706.01

Bear Case

$-583.34

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 3.06% of revenue (heavy investment phase). Model fades this to 1.50% by Year 10, freeing up ~$1.3B 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 $916.04. 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 72.33% indicates efficient cash generation. FCF reaches $16.9B by Year 10 (20.36% 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)31.64%

Debt Weight (D/V)68.36%

WACC Calculation

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

WACC = (31.64% × 10.40%) + (68.36% × 5.82%)

= 7.27%

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	$2.0B	$1.8B	$1.7B	$1.6B	$1.2B
- Δ NWC	-$18.4B	$378M	$536M	$563M	$606M
Free Cash Flow	$28.0B	$10.1B	$11.9B	$14.1B	$16.9B
Discount Factor	0.932	0.810	0.704	0.612	0.496
Present Value	$26.1B	$8.2B	$8.4B	$8.6B	$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%

WACC7.27%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$362.3B

PV of Terminal Value$179.6B

Exit Multiple Method

Year 10 EBITDA$23.3B

Exit Multiple (EV/EBITDA)12.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$279.8B

PV of Terminal Value$138.7B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$101.0B

PV of Terminal Value$179.6B

Enterprise Value$280.5B

(-) Net Debt$455.0B

Equity Value-$174.5B

Shares Outstanding313M

Price per Share$-557.97

Exit Multiple Method

PV of Projected FCFs$101.0B

PV of Terminal Value$138.7B

Enterprise Value$239.6B

(-) Net Debt$455.0B

Equity Value-$215.4B

Shares Outstanding313M

Price per Share$-688.71

Pure Model Fair Value

$-623.34

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%
5.27%	$-399.54	$-330.72	$-237.06	$-102.16	$-26.31
6.27%	$-561.62	$-523.35	$-474.94	$-411.73	$-325.71
7.27%	$-675.40	$-651.84	$-623.34	$-588.17	$-543.67
8.27%	$-761.31	$-745.78	$-727.56	$-705.89	$-679.67
9.27%	$-829.37	$-818.62	$-806.30	$-792.00	$-775.23

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

$-583.34

-163.7% vs current

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

Base Case

$-623.34

-168.0% vs current

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

Bull Case

$-706.01

-177.1% 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 / Rev3.06%

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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