Given the Q2 results from the largest U.S. banks, it’s tough to argue that Goldman Sachs isn’t a winner this earnings season. In addition to beating both top and bottom line expectations, the stock trades at an attractive valuation, and the financial institution is growing in certain ways worth monitoring in the long run.  

For investors who measure their returns over the long haul, Goldman Sachs looks like a compelling buying opportunity even if a recession hits in the near future.

What’s all the fuzz

The second-quarter results of Goldman Sachs included some negative aspects. As a result of a worldwide slowdown in investment banking, earnings fell by 48% year over year.

As a result of the uncertain economic climate, mergers and acquisitions activity has dried up, as well as equity and debt underwriting. Revenue from investment banking fees at Goldman fell by 41% from the previous year.

No matter the macro conditions, Goldman Sachs is built to make money. Investment banking and wealth management generally do poorly in turbulent markets, but their massive trading operation often thrives. 

Compared to last year, fixed income trading revenue increased by a staggering 55%. Trading revenue totaled $6.5 billion, up 32% from a year ago and more than half of the bank’s total revenues.

As a result of the surge in trading revenue, Goldman Sachs exceeded earnings expectations on both the top and bottom lines, demonstrating the company’s resilience in tough economic times.

Do I jump right in?

During the recent downturn, Goldman Sachs stock is down about 24% from its all-time high, which isn’t as bad as some of its peers.

With trailing 12-month earnings just 7.2 times book value, the bank is a compelling value. However, Goldman’s earnings are expected to contract due to the current climate, and the stock trades for less than 9.5 times forward earnings.

Currently, the dividend yield is 3.1%, and the company has aggressively repurchased its shares. Given its resilience and growth potential, Goldman Sachs looks like a very cheap bank stock.