For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and 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?
Goldman Sachs' Business In-Depth
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 65.3% of net revenues as of Dec. 31, 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 (30.2%) 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 (4.5%) 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.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Goldman Sachs ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in January 2015 would be worth $3,475.77, or a gain of 247.58%, as of January 23, 2025, and this return excludes dividends but includes price increases.
The S&P 500 rose 195% and the price of gold increased 104.81% over the same time frame in comparison.
Analysts are forecasting more upside for GS too.
Shares of Goldman have outperformed the industry in the past six months. Its fourth-quarter 2024 results benefited from a strong performance in its IB business and a solid Asset & Wealth Management division. Its refocus on the core strengths of IB and trading businesses through restructuring initiatives will boost its presence in overseas markets. A decent liquidity position will aid capital distribution moves. However, the company's global banking and markets division will likely be under pressure due to the volatile nature of capital markets. Given the current geopolitical concerns, high dependence on overseas revenues is worrisome. Rising expenses might limit bottom-line growth. Nonetheless, the company's strategic acquisitions and expansion in private equity credit line will help diversify the fee revenue base, aiding top-line growth.
The stock has jumped 8.57% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 8 higher, for fiscal 2025; the consensus estimate has moved up as well.7 Best Stocks for the Next 30 Days
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The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
