MSCI (MSCI) AI Stock Analysis

• Market Cap: $44.27B
• Dividend Yield: 1.15%
• Average Volume (3M): 550.58K
• Price to Earnings (P/E): 39.3
• Beta (1Y): 0.87
• Revenue Growth: 11.67%
• EPS Growth: -0.89%
• Country: US
• Employees: 6,184
• Sector: Financial
• Sector Strength: 84
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 4.00
• Shares Outstanding: 77,371,500
• 10 Day Avg. Volume: 479,712
• 30 Day Avg. Volume: 550,584
• PEG Ratio: 10.87
• Price to Book (P/B): -45.07
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 29.83
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 4.20
• Enterprise Value/Gross Profit: 20.12
• Enterprise Value/Ebitda: 6.60
• 1Y Price Target: $627.75
• Price Target Upside: 9.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

MSCI's strong financial performance, strategic growth initiatives, and robust earnings call contribute positively to its stock score. However, significant leverage challenges and high valuation present risks that moderate the overall score.

Positive Factors

Market Conditions

Rising markets should be supportive for clients, and management is seeing a pickup in the pipeline.

Revenue Growth

MSCI's private asset segment grew revenue 5.2%.

Negative Factors

Revenue Performance

Recent revenue performance at MSCI has been damped by buy-side headwinds due to macro uncertainty, market volatility, and elevated AUM outflows.

Selling Environment

The price objective was lowered to $560 driven by lower index and analytics revenue given the tough selling environment.

MSCI Business Overview & Revenue Model

Company Description

MSCI Inc., together with its subsidiaries, provides investment decision support tools for the clients to manage their investment processes worldwide. It operates through four segments: Index, Analytics, ESG and Climate, and All Other Private Assets. The Index segment provides indexes for use in various areas of the investment process, including indexed product creation, such as ETFs, mutual funds, annuities, futures, options, structured products, over-the-counter derivatives; performance benchmarking; portfolio construction and rebalancing; and asset allocation, as well as licenses GICS and GICS Direct. The Analytics segment offers risk management, performance attribution and portfolio management content, application, and service that provides an integrated view of risk and return, and an analysis of market, credit, liquidity, and counterparty risk across asset classes; managed services, including consolidation of client portfolio data from various sources, review and reconciliation of input data and results, and customized reporting; and HedgePlatform to measure, evaluate, and monitor the risk of hedge fund investments. The ESG and Climate segment provides products and services that help institutional investors understand how ESG factors impact the long-term risk and return of their portfolio and individual security-level investments; and data, ratings, research, and tools to help investors navigate increasing regulation. The All Other Private Assets segment includes real estate market and transaction data, benchmarks, return-analytics, climate assessments and market insights for funds, investors, and managers; business intelligence to real estate owners, managers, developers, and brokers; and offers investment decision support tools for private capital. It serves asset owners and managers, financial intermediaries, wealth managers, real estate professionals, and corporates. MSCI Inc. was incorporated in 1998 and is headquartered in New York, New York.

How the Company Makes Money

MSCI Inc. generates revenue primarily through its index, analytics, and ESG (Environmental, Social, and Governance) research products. The company's index segment earns money by licensing its indices to asset managers who use them to create mutual funds, ETFs, and other investment products. MSCI also charges subscription fees for its analytics and risk management tools, which help clients assess and manage investment risk. Additionally, the ESG segment contributes to revenue by providing research and ratings that help investors incorporate sustainability into their investment processes. Key partnerships with financial institutions and asset managers enhance MSCI's revenue through collaborative product development and distribution agreements.

MSCI Financial Statement Overview

Summary

MSCI excels in profitability with strong revenue growth and impressive margins but faces significant leverage challenges with negative equity, posing financial instability risks.

Income Statement

MSCI shows strong revenue growth with a solid TTM revenue of $2.92 billion, up from $2.85 billion annually, indicating a positive growth trajectory. The gross profit margin is robust at 80.6%, and the net profit margin stands at 39.1%, reflecting high profitability. Both EBIT and EBITDA margins are impressive at 53.7% and 59.5%, respectively, showcasing operational efficiency. However, the growth rate from previous periods shows a deceleration, which might be a concern if it continues.

Balance Sheet

The company faces significant leverage challenges, with a negative stockholders' equity of $958.57 million, leading to an unquantifiable debt-to-equity ratio. This suggests high financial risk and potential instability. Total liabilities exceed total assets, and the negative equity ratio indicates a reliance on debt financing. Despite these challenges, MSCI has a solid asset base of $5.34 billion, which supports its operational needs.

Cash Flow

MSCI demonstrates strong cash flow management with a TTM free cash flow of $1.44 billion, showing resilience and the ability to generate cash. The operating cash flow to net income ratio is healthy, indicating effective conversion of income to cash. However, the free cash flow growth rate is modest, suggesting limited expansion in cash generation capabilities. Financing activities are negative, reflecting potential debt repayments or shareholder distributions.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.92B	2.86B	2.53B	2.25B	2.04B	1.70B
	Gross Profit
2.35B	2.34B	2.08B	1.84B	1.68B	1.40B
	EBIT
1.57B	1.53B	1.38B	1.21B	1.07B	884.76M
	EBITDA
1.79B	1.75B	1.71B	1.36B	1.15B	953.34M
	Net Income Common Stockholders
1.14B	1.11B	1.15B	870.57M	725.98M	601.82M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
519.32M	405.85M	457.81M	993.56M	1.42B	1.30B
	Total Assets
5.48B	5.45B	5.52B	5.00B	5.51B	4.20B
	Total Debt
4.67B	4.63B	4.63B	4.64B	4.31B	3.52B
	Net Debt
4.15B	4.23B	4.17B	3.65B	2.89B	2.22B
	Total Liabilities
6.13B	6.39B	6.26B	6.01B	5.67B	4.64B
	Stockholders Equity
-650.52M	-940.00M	-739.76M	-1.01B	-163.47M	-443.23M
Cash Flow		Free Cash Flow
1.44B	1.47B	1.15B	1.02B	883.27M	760.13M
	Operating Cash Flow
1.50B	1.50B	1.24B	1.10B	936.07M	811.11M
	Investing Cash Flow
-144.83M	-144.25M	-819.38M	-79.33M	-1.04B	-241.79M
	Financing Cash Flow
-1.52B	-1.40B	-953.93M	-1.43B	229.50M	-779.04M

MSCI Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 571.21
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MSCI, the sentiment is Positive. The current price of 571.21 is above the 20-day moving average (MA) of 552.31, above the 50-day MA of 550.16, and below the 200-day MA of 573.25, indicating a neutral trend. The MACD of 7.08 indicates Negative momentum. The RSI at 60.34 is Neutral, neither overbought nor oversold. The STOCH value of 78.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MSCI.

MSCI Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FDS	77 Outperform	$17.85B	33.63	28.12%	0.88%	4.66%	11.15%
NDAQ	77 Outperform	$47.06B	37.14	11.43%	1.17%	25.89%	16.37%
SPGI	76 Outperform	$160.80B	41.02	11.68%	0.71%	12.98%	42.72%
MCO	75 Outperform	$88.53B	42.24	57.90%	0.71%	15.95%	26.38%
MORN	75 Outperform	$13.12B	34.87	25.68%	0.55%	10.11%	79.71%
MSCI	71 Outperform	$44.27B	39.35	-117.99%	1.15%	11.67%	-0.89%
Sector *	64 Neutral	$12.82B	9.87	7.67%	17000.34%	12.39%	-5.85%

MSCI Corporate Events

Wayne Edmunds Retires from MSCI Board of Directors

On February 23, 2025, Wayne Edmunds announced his retirement from MSCI Inc.’s Board of Directors, where he has served since 2015. His departure is not due to any disagreements with the company’s management or policies. Following his retirement, the Board plans to reduce its size from thirteen to twelve members.