Moody's (MCO) AI Stock Analysis

• Market Cap: $88.53B
• Dividend Yield: 0.71%
• Average Volume (3M): 882.63K
• Price to Earnings (P/E): 42.2
• Beta (1Y): 1.19
• Revenue Growth: 15.95%
• EPS Growth: 26.38%
• Country: US
• Employees: 15,795
• Sector: Financial
• Sector Strength: 84
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 3.83
• Shares Outstanding: 179,900,000
• 10 Day Avg. Volume: 631,368
• 30 Day Avg. Volume: 882,630
• PEG Ratio: 14.59
• Price to Book (P/B): 22.76
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 33.72
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $503.93
• Price Target Upside: 3.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

Moody's Corporation demonstrates strong financial performance and positive long-term prospects, driven by robust revenue growth and strategic investments. Despite technical analysis indicating potential short-term weaknesses and a premium valuation, the company's solid market position and focus on innovation support a favorable outlook.

Positive Factors

Analyst Recommendation

Analyst reiterates a Buy rating for Moody's stock, indicating confidence in its long-term potential.

Financial Performance

Moody’s first-quarter results came in above expectations, driven by revenue upside and strong cost control.

Valuation

The current valuation of Moody's at 28x P/E is considered attractive compared to its historical average.

Negative Factors

Macroeconomic Environment

There is near-term uncertainty around the macroeconomic environment, which may lead to lower issuance activity and delayed decision-making for clients.

Market Trends

The outlook for rated issuance has been lowered due to softer trends, weaker GDP growth, and wider high-yield spread assumptions.

Revenue Guidance

Full-year guidance was lowered due to a more challenging backdrop for debt issuance.

Moody's Business Overview & Revenue Model

Company Description

Moody's Corporation operates as an integrated risk assessment firm worldwide. It operates in two segments, Moody's Investors Service and Moody's Analytics. The Moody's Investors Service segment publishes credit ratings and provides assessment services on various debt obligations, programs and facilities, and entities that issue such obligations, such as various corporate, financial institution, and governmental obligations, as well as and structured finance securities. This segment provides ratings in approximately 140 countries. Its ratings are disseminated through press releases to the public through electronic media, including the internet and real-time information systems used by securities traders and investors. This segment has rated approximately 5,000 non-financial corporates; 3,600 financial institutions; 16,000 public finance issuers; 145 sovereigns; 47 supranational institutions; 459 sub-sovereigns; and 1,000 infrastructure and project finance issuers, as well as 9,100 structured finance deals. The Moody's Analytics segment develops a range of products and services that support the risk management activities of institutional participants in financial markets; and offers subscription based research, data, and analytical products comprising credit ratings, credit research, quantitative credit scores and other analytical tools, economic research and forecasts, business intelligence and company information products, commercial real estate data and analytical tools, and on-line and classroom-based training services, as well as credentialing and certification services. It also offers offshore analytical and research services with learning solutions and certification programs; and software solutions, as well as related risk management services. The company was formerly known as Dun and Bradstreet Company and changed its name to Moody's Corporation in September 2000. Moody's Corporation was founded in 1900 and is headquartered in New York, New York.

How the Company Makes Money

Moody's Corporation generates revenue primarily through its two main segments: Moody's Investors Service and Moody's Analytics. The MIS segment is a major revenue driver, earning fees from issuing credit ratings for a diverse range of debt obligations and securities. These ratings are essential for issuers looking to attract investment, as well as for investors assessing risk. Moody's Analytics complements this by offering subscription-based services for risk management software, tools, and data solutions. Additionally, Moody's engages in strategic partnerships and acquisitions to expand its service offerings and geographic reach, further bolstering its revenue streams. The company's reputation and established position in the financial markets enhance its ability to maintain and grow its client base, ensuring a steady income flow.

Moody's Financial Statement Overview

Summary

Moody's financial health is robust, characterized by strong profitability and effective cash generation. The company shows a solid growth trajectory with a healthy profit margin and effective use of equity. However, reliance on debt and a slight decrease in cash flow growth are areas to monitor.

Income Statement

Moody's demonstrates strong profitability with a consistent growth trajectory. The TTM gross profit margin is robust at 69.73%, and the net profit margin is healthy at 29.15%. Revenue growth from the previous year is 21.83%, indicating solid revenue generation. EBIT and EBITDA margins are strong at 40.62% and 38.29%, respectively, reflecting operational efficiency.

Balance Sheet

Moody's maintains a stable financial position with a debt-to-equity ratio of 1.93, indicating reliance on debt but within manageable levels. The return on equity is impressive at 56.92%, showcasing effective use of equity to generate profits. However, the equity ratio of 24.51% suggests moderate leverage, which could pose potential risks if not managed carefully.

Cash Flow

The cash flow analysis highlights Moody's ability to generate substantial cash, with a free cash flow growth rate of -9.06% when comparing TTM to the previous annual report, which reflects slight decrease but remains strong. The operating cash flow to net income ratio of 1.34 and free cash flow to net income ratio of 1.23 indicate effective cash conversion from earnings.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
7.23B	7.09B	5.92B	5.47B	6.22B	5.37B
	Gross Profit
5.04B	5.14B	4.23B	3.85B	4.58B	3.90B
	EBIT
2.94B	2.88B	2.14B	1.88B	2.84B	2.39B
	EBITDA
2.91B	3.33B	2.61B	2.33B	3.09B	2.66B
	Net Income Common Stockholders
2.11B	2.06B	1.61B	1.37B	2.21B	1.78B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.20B	2.97B	2.19B	1.86B	1.90B	2.70B
	Total Assets
15.10B	15.51B	14.62B	14.35B	14.68B	12.41B
	Total Debt
7.14B	7.75B	7.42B	474.00M	560.00M	521.00M
	Net Debt
5.00B	5.34B	5.29B	-1.29B	-1.25B	-2.08B
	Total Liabilities
11.24B	11.78B	11.15B	14.35B	11.76B	10.65B
	Stockholders Equity
3.70B	3.56B	3.32B	2.52B	2.92B	1.76B
Cash Flow		Free Cash Flow
2.50B	2.52B	1.88B	1.19B	1.87B	2.04B
	Operating Cash Flow
2.82B	2.84B	2.15B	1.47B	2.00B	2.15B
	Investing Cash Flow
-736.00M	-1.06B	-247.00M	-262.00M	-2.62B	-1.08B
	Financing Cash Flow
-2.44B	-1.45B	-1.58B	-1.21B	-122.00M	-351.00M

Moody's Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 486.99
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCO, the sentiment is Positive. The current price of 486.99 is above the 20-day moving average (MA) of 464.71, above the 50-day MA of 451.41, and above the 200-day MA of 471.43, indicating a bullish trend. The MACD of 11.98 indicates Negative momentum. The RSI at 63.94 is Neutral, neither overbought nor oversold. The STOCH value of 88.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCO.

Moody's 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%
SPGI	76 Outperform	$160.80B	41.02	11.68%	0.70%	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	$44.31B	39.38	-117.99%	1.15%	11.67%	-0.89%
DNB	66 Neutral	$4.01B	―	-0.64%	2.23%	2.52%	42.27%
Sector *	64 Neutral	$12.82B	9.87	7.67%	17000.34%	12.39%	-5.85%

Moody's Corporate Events

Moody’s Reports Strong Q1 2025 Performance

Moody’s Corporation reported a strong performance for the first quarter of 2025, with revenues reaching $1.9 billion, marking an 8% increase from the previous year. Both Moody’s Analytics and Moody’s Investors Service saw revenue growth of 8%, despite a 1% negative impact from foreign currency translation. The company also achieved record revenue in its Ratings franchise, driven by demand for high-quality credits and refinancing activities. Operating expenses rose by 9% due to investments, restructuring charges, and M&A activities. Moody’s updated its full-year guidance, projecting adjusted diluted EPS growth of 9% at the midpoint, reflecting its financial strength and commitment to long-term value creation amidst market volatility.

Spark’s Take on MCO Stock

According to Spark, TipRanks’ AI Analyst, MCO is a Outperform.

Moody’s Corporation scores a solid 78, driven by excellent financial performance and positive earnings call sentiment. The company’s strong revenue growth, profitability, and strategic investments highlight its robust operational management. However, the technical analysis indicates potential short-term weaknesses, and the valuation suggests the stock might be priced at a premium. Despite these concerns, Moody’s strong market position and positive long-term outlook support a favorable overall stock score.

To see Spark’s full report on MCO stock, click here.

Moody’s Announces New Chief Accounting Officer

On March 11, 2025, Moody’s Corporation announced that Caroline Sullivan, the Chief Accounting Officer and Corporate Controller, will depart from her position on April 1, 2025. Jason Phillips, who has been with the company since 2003 and has held various significant roles, will succeed her. This transition is expected to maintain stability in the company’s accounting operations, given Mr. Phillips’ extensive experience and involvement in key financial reporting and policy teams.