How to Approach Goldman Stock Ahead of Its Q3 Earnings Release?

The Goldman Sachs Group, Inc. GS is scheduled to release third-quarter 2025 earnings on Oct. 14 before the opening bell.

In the first half of 2025, Goldman's results benefited from solid growth in the Global Banking & Markets division, and the investment banking (IB) business. Yet, the rise in expenses was concerning.

Goldman has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in the trailing four quarters, with an average earnings surprise of 24.37%.

Earnings Surprise History

Let us see how GS is expected to fare in terms of revenues and earnings this time around.

The Zacks Consensus Estimate for third-quarter 2025 revenues is pegged at $14.01 billion, calling for a 10.4% rise from the year-ago quarter's reported figure.

In the past seven days, the consensus estimate for quarterly earnings has been revised upward to $10.93 per share. The projection suggests a rally of 30.1% from the year-ago quarter's reported figure.

Estimate Revision Trend

Factors to Shape GS’s Q3 Results

Market-Making Revenues: The third quarter saw solid client activities and market volatility, driven by the uncertainty over the impacts of tariffs on the U.S. economy and changes in the Fed’s policy stance. Additionally, volatility was high in equity markets and other asset classes, including commodities, bonds and foreign exchange. Therefore, Goldman's market-making revenues are likely to have witnessed a rise in the quarter to be reported.

IB Fees: Global mergers and acquisitions (M&As) in the third quarter of 2025 rebounded impressively after reaching lows in April and May following President Trump’s announcement of ‘Liberation Day’ tariff plans. As corporates adapted to the rapidly evolving geopolitical and macroeconomic scenarios, deal-making activity picked up. This, along with Goldman’s leadership in the IB space, is also likely to have supported advisory fees to some extent in the quarter to be reported.

The IPO market in the third quarter performed impressively, with a notable increase in both the number of IPOs and the amount of capital raised. Several factors, including strategic tariff pauses and positive economic data, fueled the rise. Also, global bond issuance volume was decent. As such, GS’s leadership position in worldwide announced and completed M&As, equity and equity-related offerings is likely to have provided it an edge over its peers, offering support to the company’s quarterly IB revenues.

At the Barclays 23rd Annual Global Financial Services Conference in early September, Goldman’s CEO David Solomon stated that the company logged strong activity across IPOs and M&As as of late, thanks in part to a friendlier regulatory environment under the pro-growth Trump administration. With rising M&As and IPO pipelines, the company’s decent IB backlog and leadership position will continue to support its performance.

The Zacks Consensus Estimate for IB revenues is pegged at $2.22 billion, suggesting a 19.4% rise from the year-ago quarter’s actual.

Net Interest Income (NII): Per the Fed’s latest data, the demand for overall loans was solid in the first two months of the quarter. This is likely to have aided Goldman's loan growth.

The Federal Reserve reduced interest rates by 25 basis points to 4.00-4.25% in September. With rates remaining largely stable throughout most of the quarter, funding and deposit costs likely stabilized, supporting growth in GS’s NII in the third quarter.

The Zacks Consensus Estimate for NII is pegged at $2.91 billion, suggesting a 12.1% rise from the year-ago quarter’s actual.

Expenses: Goldman’s investments in technology and market development expenses for business expansion and a rise in transaction-based expenses due to higher client activity are anticipated to have led to increased expenses in the to-be-reported quarter.

What Our Model Unveils for Goldman

Our proven model conclusively predicts an earnings beat for GS this time. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. That is the case here, as you can see below.

Goldman has an Earnings ESP of +1.68%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

GS carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

GS’s Price Performance & Valuation

In the third quarter of 2025, Goldman's shares outperformed the industry and its close peers, JPMorgan JPM and Morgan Stanley MS. 

Price Performance

JPMorgan is slated to announce quarterly numbers on Oct. 14, whereas Morgan Stanley is expected to come out with its performance details on Oct. 15. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Let us look at the value GS offers investors at the current levels.

Currently, Goldman is trading at 14.99X forward 12-month price/earnings (P/E). Meanwhile, the industry’s forward earnings multiple sits at 14.75X. The company’s valuation looks somewhat expensive compared with the industry average.

Price-to-Earnings F12M

Its peer, JPMorgan, is trading at a forward 12-month P/E of 14.87X while Morgan Stanley is trading at 16.53X.

How to Play Goldman Stock Before Q3 Earnings?

GS continues to streamline its operations as it retreats from underperforming, non-core consumer banking ventures and sharpens its focus on core strengths — particularly asset and wealth management business. This strategic pivot is designed to create a more stable and recurring revenue base.

The company plans to ramp up its lending services to private equity and asset managers, and aims to expand internationally. In sync with this, Goldman Asset Management — a unit of GS — intends to expand its private credit portfolio to $300 billion in five years, positioning the unit for sustained, long-term expansion. 

GS's strong liquidity position underpins its robust capital return program. Post-clearing the 2025 Fed stress test, the company increased its quarterly dividend to $4.00 per common share, marking an increase of 33.3% from the prior payout. In the past five years, the company has hiked dividends five times, with an annualized growth rate of 21.8%. 

While Goldman’s fundamentals and growth prospects remain solid, investors may want to exercise patience. Rising expenses and a relatively high valuation suggest limited near-term upside.

To get clarity and possibly an appealing entry point, those interested in adding the GS stock to their portfolios may be better off waiting until after the quarterly results are released. Also, they should keep an eye on macroeconomic factors that are likely to influence the company’s performance. Those who already own the GS stock can consider retaining it because it is less likely to disappoint over the long term.

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This article originally published on Zacks Investment Research (zacks.com).

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