QS Research · Michael Burry's Scion Capital analyst template · 2006
GOLDMAN SACHS GROUP INC (GS)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction high · base case -39% · downside -42% · upside -25%
The market is capitalizing Goldman's peak-cycle TTM earnings: $21.31B net income to common and 17.1% ROE support an 11.8x P/E and 2.02x P/B, but FY2020-FY2025 average net income is only $13.09B and equals about a 10.5% return on today's $124.93B equity. On that normalized base, the given 11.8x P/E implies $154.5B of value, 38.8% below the $252.27B market cap; even the peer-high 14.4x on normalized earnings gives $188.5B, -25.3%, while the low-end 11.2x gives $146.6B, -41.9%. The only path to a positive return is the current $21.31B TTM earnings level persisting at a 14.4x multiple ($306.9B, +21.6%), which is a peak-earnings assumption, not a cycle-normal one. With backlog already rolling over, credit provisions rising and one-off Apple Card/tax items in recent results, the normalized value says short rather than pass.
Key numbers
- Share price: $874.62
- Market cap: $252.27B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $69.70B
- P/E (TTM): 11.8x
- Price / book: 2.02x
The 15 boxes
- ✓ 1. Long-form business notes
FY2025 Goldman Sachs is a BHC/FHC with three reporting segments: Global Banking & Markets, Asset & Wealth Management and Platform Solutions. Revenue ran $44.56B in FY2020, $59.34B in FY2021, $47.37B in FY2022, $46.25B in FY2023, $53.51B in FY2024 and $58.28B in FY2025, with net income from $8.91B to $16.30B over those years, so the business is cyclical at the revenue and earnings line. The oldest 10-K here (FY2020) had four segments (Investment Banking, Global Markets, Asset Management, Consumer & Wealth Management); by FY2025 reporting had moved to three segments and Platform Solutions was being narrowed via the Apple Card transition and GM card sale.
- ✓ 2. Competitive advantage
The 10-K describes an intensely competitive industry in which Goldman competes on 'transaction execution, our products and services, innovation, reputation, creditworthiness and price' and admits it has priced credit below the risk taken in some deals — that is price-taking, not a durable pricing advantage. The record supports that reading: revenue fell from $59.34B (FY2021) to $46.25B (FY2022) and $46.25B... pre-tax income fell from $27.04B to $10.74B by FY2023 before recovering to $21.85B in FY2025. Simple ROE (net income / period-end equity) went 19.2% (FY2021) → 6.8% (FY2023) → 13.0% (FY2025) on an equity base that rose every year, so the franchise earns excess returns in good years but has not demonstrated a stable, cycle-proof spread. The claimed edge is scale and capital commitment (global footprint, large transactions) plus reputation, but the company itself lists client-mix disadvantages versus peers.
- ✓ 3. 10-Q takeaways
Q3 2026 was a strong trading and banking quarter, not a one-off-boosted one: net revenues of $18.68 billion (Q3 2026) were 23% above Q3 2025, net earnings $5.29 billion produced ROE of 18.7% and diluted EPS of $17.01, and the efficiency ratio improved to 60.5% from 62.3%. Asset & Wealth Management and Global Banking & Markets drove the upside, while Platform Solutions was hit by markdowns on the Apple Card portfolio that was moved to held for sale in Q4 2025 — a discrete item, not operating trend. Capital return was heavy ($4.49 billion in Q3 2026: $3.00 billion buybacks, $1.49 billion dividends) with CET1 at 12.4% Standardized / 13.6% Advanced, and book value per share rose to $372.64. No formal guidance was given; the stated risks are Middle East conflict, inflation, central bank rate hikes and a credit-stress scenario that would add roughly $0.6 billion to the allowance.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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