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Goldman Sachs enters 2019 with old successes and new challenges

Published Last updated This article is more than 2 years old.

Goldman Sachs has long been known as the preeminent M&A shop in town, and 2018 proved that again, as Goldman made more money advising clients on big transactions than any other bank.

That kind of M&A leadership has often contributed to Goldman having the best return on equity among its major competitors, but that’s no longer the case.

Revenues have retreated from their nosebleed highs of 2007 and have remained stubbornly flat for the past several years.

All of this is happening while Goldman employs more than twice the number of people it had when it first went public.

Another change since Goldman’s IPO is its price-to-tangible book value. When Goldman went public, its stock was trading at around 3.5 times its book value. By the end of 2017, that value had slid by more than 50% to 1.44.

In 2018, Goldman’s stock was down around 35% and was the worst performing stock in the Dow Jones Industrial Average.