DCF Studio

    GS · NYQ · Financial Services

    The Goldman Sachs Group, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 45.56

    Market price

    USD 942.00

    Implied upside

    -95.2%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    Wrong toolThis model values the shares at 4.8% of the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.

    Current EV/EBITDA of 20.6x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 45.56-95.2%
    Exit multiple
    USD 825.29-12.4%
    Market price
    USD 942.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn8bn15bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 62.5bnUSD 66.9bnUSD 71.7bnUSD 76.9bnUSD 82.4bn+7.2%
    EBITUSD 19.3bnUSD 20.7bnUSD 22.2bnUSD 23.7bnUSD 25.4bn+7.2%
    NOPATUSD 15.2bnUSD 16.3bnUSD 17.5bnUSD 18.8bnUSD 20.1bn+7.2%
    Add depreciation & amortisationUSD 3.7bnUSD 4.0bnUSD 4.3bnUSD 4.6bnUSD 4.9bn+7.2%
    Less capital expenditureUSD -3.2bnUSD -3.4bnUSD -3.7bnUSD -3.9bnUSD -4.2bn+7.2%
    Less increase in working capitalUSD -4.2bnUSD -4.5bnUSD -4.8bnUSD -5.1bnUSD -5.5bn+7.2%
    Free cashflow to firmUSD 11.6bnUSD 12.5bnUSD 13.3bnUSD 14.3bnUSD 15.3bn+7.2%
    Discount factor0.96210.89070.82450.76320.7065-
    Present valueUSD 11.2bnUSD 11.1bnUSD 11.0bnUSD 10.9bnUSD 10.8bn-0.8%
    Present Value Of The ForecastUSD 55.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.190Reported 1.283, pulled toward 1.0 (Blume)
    Cost of equity11.54%Risk-free + beta x equity risk premium
    Cost of debt7.00%Implied cost of debt of 18.3% is not a credible funding cost, so risk-free + 2bp is assumed instead. Interest expense and reported debt are measuring different things - common for banks, whose interest expense includes deposits that total debt excludes.
    Market capitalisationUSD 274.3bn41.5% of capital
    Total debtUSD 386.1bn58.5% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.03%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 45.56

    77% of EV

    Forecast FCFF, final year
    USD 15.3bn
    Capex at depreciation, working capital in reinvestment
    USD 20.1bn
    Less reinvestment at g/ROIC (31.2% of NOPAT)
    USD -6.3bn
    Capitalised
    USD 13.8bn
    ROIC (WACC floor)
    8.0%
    Terminal value, undiscounted
    USD 256.7bn
    Terminal value, discounted
    USD 181.4bn
    Enterprise value
    USD 236.4bn
    Less net debt
    USD 221.9bn
    Equity value
    USD 14.5bn

    Exit at 20.0x EBITDA

    Value per shareUSD 825.29

    89% of EV

    Terminal value, undiscounted
    USD 607.2bn
    Terminal value, discounted
    USD 429.0bn
    Enterprise value
    USD 484.0bn
    Less net debt
    USD 221.9bn
    Equity value
    USD 262.1bn

    Spread between methods: 179%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.03%302.04306.08310.11314.15318.18
    7.03%152.15155.46158.78162.10165.42
    8.03%39.9942.7845.5648.3551.13
    9.03%-46.99-44.61-42.23-39.86-37.48
    10.03%-116.33-114.28-112.23-110.18-108.12

    Outlined: this model. Green text: above today's price of 942.00. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year7.2%32.0%+24.9pp
    EBIT margin30.9%65.6%+34.7pp
    Discount rate8.0%3.8%-4.2pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.