Before the Call: Can Goldman Measure Up?

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On Tuesday, investment bank Lehman Brothers (NYSE: LEH) announced earnings that surpassed analysts' expectations. Along with a big rate cut from the Federal Reserve, that news helped shares of Lehman and its investment-banking brethren achieve some nice gains. But is this industrywide spike in optimism warranted? Goldman Sachs (NYSE: GS) shareholders certainly hope so, as they await the bank's earnings report on Thursday.

After the earnings are released, we'll have plenty of data to dig into. But before that happens, let's step back and see what investors think about Goldman as a long-term investment. To gain this insight, I've tapped into Motley Fool CAPS, where more than 65,000 investors have united to offer their thoughts on more than 5,000 companies, Goldman among them. Here's what Fools have to say about the company.

Up or down?
Some 2,494 investors have weighed in on Goldman, and as a group, they're lukewarm on the stock's prospects.

Just less than 93% of all players who've rated the company have given it a thumbs-up -- not bad, but that's only enough to give the stock a middling three-star rating. When it comes to the CAPS All-Stars -- investors in the top 20% of all CAPS players -- the percentage of positive ratings is a significantly lower 88%.

Among comparable companies, Goldman nonetheless remains at the top of the heap.                 

Stock	CAPS Rating (out of 5)
Goldman Sachs	***
JPMorgan (NYSE: JPM)	***
Deutsche Bank (NYSE: DB)	**
Lehman Brothers	**
Merrill Lynch (NYSE: MER)	**
Morgan Stanley (NYSE: MS)	**
Bear Stearns (NYSE: BSC)	*

Bull pitch
CAPS All-Star mrex27 is bullish on Goldman, considering it a way for individual investors to take part in "the wealth being created by hedge funds" and "the fantastic money grab by private equity players." A self-proclaimed Wall Street veteran, mrex says that the only mistake Goldman ever made was going public.

Bear pitch
CAPS player cdulan calls herself a "Goldman fan gone bear." Why? She cites a number of reasons, including the risk Goldman's taken by putting a lot of its own money in play, and she believes the emerging markets are due for a correction.

The Foolish last word
Goldman has had a good run over the past few years, but several factors could conspire to bring that run to an end. Be sure to tune into Goldman's earnings on Thursday to see the outcome.