Should You Buy Goldman Sachs While It's Below $650?

Core Viewpoint - Goldman Sachs has demonstrated strong performance in the financial services industry, with significant stock price appreciation and robust revenue growth, particularly in investment banking and investment management [1][2][3]. Financial Performance - In 2024, Goldman Sachs reported total revenue of $53.5 billion, a 16% increase from the previous year, following a 2% decline in 2023 [2]. - Net interest income surged by 27%, contributing to a 68% increase in net income for 2024 [3]. - The company is projected to grow its earnings per share at a compound annual rate of 12% over the next three years, surpassing its trailing 10-year average of 9% [7]. Market Position and Opportunities - Goldman Sachs ended the year as the No. 1 M&A advisor, indicating strong positioning in investment banking [2]. - The company is optimistic about future prospects, citing potential catalysts for continued activity in the financial markets [3]. - The launch of a Capital Solutions Group aims to capitalize on opportunities in private credit and private equity, enhancing the bank's ability to serve clients [6]. Valuation and Stock Performance - As of February 26, shares were trading at a price-to-earnings ratio of 15.3, which is considered historically expensive [9]. - Despite impressive five-year stock returns, expectations are high, and the current valuation may limit future returns for new investors [10][11].