Buffett Brain · Research note
Score updated 29 Oct 2026 · analysis from 1 Jun 2026
GS· Financial Services
The Goldman Sachs Group
Goldman Sachs is a brilliant trading house riding 6x leverage, and a negative owner-earnings yield of -15.9% tells me the cash leaves before it ever reaches me.
Buffett fit
Weak fit
Owner
37
Durability
55
Management
49
Price
33
Score updated 29 Oct 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Financial Services stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned all of Goldman, I would worry that the business earns a of just 0.9% on a trailing basis and 2.2% over five years.
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Goldman has survived since 1869 and the brand still opens doors, which is why durability scores 55 rather than lower.
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Management has shrunk the share count at 2.8% a year, which I usually applaud, but buying back stock while runs negative relative to net income at -2.75 times is borrowing to repurchase, not returning surplus.
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There is no here for an owner-minded buyer. The owner-earnings yield is negative at -15.9%, meaning on a cash basis the business consumes rather than throws off cash, and the trailing of 17.0 asks me to pay a full price for that.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1 of 55.5% reflects a genuinely high-value advisory and trading franchise with real brand power.
- 2Revenue compounded at 17.8% annually, showing the franchise can capture more activity when markets cooperate.
- 3 of 20.5% is solid for a capital-markets business and shows cost discipline in the core.
- 4Share count has shrunk 2.8% per year, so per-share ownership grows even when the headcount is flat.
Concerns
7- 1Valuation is rich for what an owner keeps: the owner-earnings yield is negative at -15.9% while the sits at 17.0, so a valuation score of 33 is deserved.
- 2 is just 0.9% trailing and 2.2% over five years, far below what I would call a wonderful business.
- 3Financial health scores a flat 0: is 6.1x, net-debt-to-EBITDA is 29.8x, and the current ratio is 0.02.
- 4Interest coverage of 0.34 means operating earnings do not even cover interest, a fragile spot if funding costs rise.
Price history
$928+127.9%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Goldman makes its money advising on deals, trading securities, underwriting offerings, and increasingly managing other people's assets for fees. The of 20.5% looks respectable and revenue grew at a 17.8% clip, but a bank's revenue is borrowed money put to work, so the headline growth flatters more than it informs. The real engine is intermediation spread and fee capture, and both swing hard with markets.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 29, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Financial Services
Questions about The Goldman Sachs Group
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