Unlocking GS: A GATS-MZEV Envelope and Fundamental Valuation
- April 27, 2025
- Posted by: Drglenbrown1
- Categories: Finance, Trading, Behavioral Finance, Finance, Trading, Market Microstructure
In the ever-shifting landscape of financial markets, combining price-action insights with solid fundamentals is key to pinpointing true value. Here, we present Goldman Sachs (NASDAQ: GS) through the lens of the GATS Multi-Zone Envelope Valuator (GATS-MZEV)—a 100% market-action model—and complement it with a concise fundamental snapshot.
1. Fundamental Pillars
A quick scan of GS’s key ratios (as of April 27, 2025) reveals:
- Trailing P/E: 12.66
- Forward P/E: 12.32
- Profit Margin (ttm): 20.15%
- Return on Equity (ttm): 7.94%
- Revenue Growth (yoy): 12.1%
- Earnings Growth (yoy): 27.8%
- Price/Book: 1.36
- Dividend Yield: 2.43%
GS trades at a below-market P/E while delivering healthy profit and earnings growth, supported by a modest dividend.
2. GATS-MZEV Envelope Construction
Our envelope model defines a Value-Zone midpoint on each timeframe by averaging two ATR-channel midpoints (EMA 25 & EMA 50). We then blend these across Daily (M1440), Weekly (M10080), and Monthly (M43200) charts:
| Timeframe | EMA 25 Mid | EMA 50 Mid | Value-Zone Mid | Weight |
|---|---|---|---|---|
| Monthly | 480.9909 | 441.8850 | 461.4380 | 0.50 |
| Weekly | 556.6700 | 533.5690 | 545.1195 | 0.30 |
| Daily | 526.4151 | 545.9552 | 536.1852 | 0.20 |
Composite Value:
3. Premium / Discount Scoring
To gauge deviation, we calculate an Envelope Half-Width on each timeframe:
| Timeframe | Half-Width = |EMA 25–EMA 50|/2 | Weighted Half-Width | |:———:|—————————————:|———————-:| | Monthly | 19.5529 | 0.50×19.5529 = 9.78 | | Weekly | 11.5505 | 0.30×11.5505 = 3.47 | | Daily | 9.7701 | 0.20× 9.7701 = 1.95 |
Average Half-Width: 9.78 + 3.47 + 1.95 = 15.20
Valuation Score:
GS trades nearly 3 envelope-widths above its multi-timeframe fair value — a sizable premium.
4. Reconciling Fundamentals & Envelope
- Fundamental Attractiveness: Low P/E, robust earnings/revenue growth, solid margins.
- Technical Premium: Price stands well above its multi-TF envelope mid, warning of a near-term pullback.
Tactical Insight: Favor waiting for a retracement toward $500–520 before initiating new long positions.
Strategic Insight: Given GS’s strong fundamentals, use a DAATS-based trailing stop to lock in gains on any envelope run, while preserving the upside in case the market sustains its rally.
5. Conclusion
The GATS-MZEV framework marries market-action envelope valuation with time-tested fundamental metrics, offering a balanced, data-driven view of where GS truly belongs. By respecting both the underlying business health and the price’s relation to its own volatility zones, traders can act with greater confidence and precision.
About the Author
Dr. Glen Brown is a quantitative strategist and financial engineer with over 20 years of experience in global markets. He specializes in developing adaptive algorithmic frameworks that blend statistical rigor with real‑time price action. Dr. Brown holds a PhD in Investments and Finance and has published widely on volatility scaling, multi‑timeframe analysis, and risk management techniques.
Disclaimer
This article is provided for informational and educational purposes only. It does not constitute investment advice or a recommendation to buy or sell any security. Trading involves risk, including the potential loss of principal. Readers should conduct their own due diligence and consult a qualified financial advisor before making any investment decisions.