Investment Thesis
Goldman Sachs exhibits strong profitability metrics with 21.4% net margins and 13.7% ROE, supported by exceptional 492.8% revenue growth. However, severe cash flow deterioration with -$47.2B free cash flow and negative operating cash flow raise critical concerns about earnings quality and sustainability. The 1.83x debt-to-equity ratio combined with weak 0.3x interest coverage and negative FCF margin signals potential liquidity stress despite substantial cash reserves.
Strengths
- Exceptional revenue growth of 492.8% YoY indicates strong market activity and business momentum
- Healthy net profit margin of 21.4% and operating margin of 27.2% demonstrate operational efficiency
- Substantial cash reserves of $164.3B provide significant liquidity buffer and financial flexibility
Risks
- Severe negative free cash flow of -$47.2B with -58.7% FCF margin questions earnings quality and sustainability
- Operating cash flow significantly negative at -$45.2B despite positive net income suggests potential working capital deterioration or non-cash accounting items
- Elevated leverage with 1.83x debt-to-equity and concerning 0.3x interest coverage ratio creates refinancing risk in rising rate environment
Key Metrics to Watch
- Operating cash flow trend and return to positive territory
- Free cash flow sustainability and working capital management
- Debt-to-equity ratio trajectory and interest coverage improvement
Financial Metrics
Revenue
80.4B
Net Income
17.2B
EPS (Diluted)
$51.32
Free Cash Flow
-47.2B
Total Assets
1.8T
Cash
164.3B
Profitability Ratios
Gross Margin
N/A
Operating Margin
27.2%
Net Margin
21.4%
ROE
13.7%
ROA
0.9%
FCF Margin
-58.7%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
1.83x
Debt/Assets
93.1%
Interest Coverage
0.33x
Long-term Debt
228.7B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-19T19:07:50.256448 |
Data as of: 2025-12-31 |
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