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Goldman (GS) Soars to 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of The Goldman Sachs Group (GS - Free Report) ? Shares have been on the move with the stock up 15.3% over the past month. The stock hit a new 52-week high of $336.19 in the previous session. The Goldman Sachs Group has gained 25.5% since the start of the year compared to the 8.6% move for the Zacks Finance sector and the 21.5% return for the Zacks Financial - Investment Bank industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on January 19, 2021, Goldman reported EPS of $12.08 versus consensus estimate of $6.99 while it beat the consensus revenue estimate by 21.63%.
For the current fiscal year, Goldman is expected to post earnings of $29.41 per share on $40.29 billion in revenues. This represents a 18.88% change in EPS on a -9.58% change in revenues. For the next fiscal year, the company is expected to earn $31.72 per share on $41.51 billion in revenues. This represents a year-over-year change of 7.88% and 3.03%, respectively.
Valuation Metrics
Goldman may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Goldman has a Value Score of B. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 11.3X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 7.7X versus its peer group's average of 12.7X. Additionally, the stock has a PEG ratio of 0.59. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Goldman currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Goldman fits the bill. Thus, it seems as though Goldman shares could have a bit more room to run in the near term.
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Goldman (GS) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of The Goldman Sachs Group (GS - Free Report) ? Shares have been on the move with the stock up 15.3% over the past month. The stock hit a new 52-week high of $336.19 in the previous session. The Goldman Sachs Group has gained 25.5% since the start of the year compared to the 8.6% move for the Zacks Finance sector and the 21.5% return for the Zacks Financial - Investment Bank industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on January 19, 2021, Goldman reported EPS of $12.08 versus consensus estimate of $6.99 while it beat the consensus revenue estimate by 21.63%.
For the current fiscal year, Goldman is expected to post earnings of $29.41 per share on $40.29 billion in revenues. This represents a 18.88% change in EPS on a -9.58% change in revenues. For the next fiscal year, the company is expected to earn $31.72 per share on $41.51 billion in revenues. This represents a year-over-year change of 7.88% and 3.03%, respectively.
Valuation Metrics
Goldman may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Goldman has a Value Score of B. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 11.3X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 7.7X versus its peer group's average of 12.7X. Additionally, the stock has a PEG ratio of 0.59. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Goldman currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Goldman fits the bill. Thus, it seems as though Goldman shares could have a bit more room to run in the near term.