Morningstar (MORN) AI Stock Analysis

• Market Cap: $9.92B
• Dividend Yield: 0.75%
• Average Volume (3M): 376.32K
• Price to Earnings (P/E): 25.0
• Beta (1Y): 0.78
• Revenue Growth: 8.23%
• EPS Growth: 64.35%
• Country: US
• Employees: 11,115
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 2.40
• Shares Outstanding: 42,177,740
• 10 Day Avg. Volume: 470,941
• 30 Day Avg. Volume: 376,323
• PEG Ratio: 0.24
• Price to Book (P/B): 8.90
• Price to Sales (P/S): 6.34
• P/FCF Ratio: 32.11
• Enterprise Value/Market Cap: 1.39
• Enterprise Value/Revenue: 5.89
• Enterprise Value/Gross Profit: 9.67
• Enterprise Value/Ebitda: 18.30
• 1Y Price Target: $325.00
• Price Target Upside: 38.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 66 Neutral
• Price Target: $283.00 ▲(20.34% Upside)

Morningstar's overall stock score is driven by strong financial performance and positive corporate developments. However, technical analysis indicates bearish momentum, and the valuation suggests a premium price, which tempers the overall score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for Morningstar's services and products, supporting long-term business expansion and market presence.

Cash Flow Management

Strong cash flow management ensures liquidity for operations and investments, enabling Morningstar to sustain growth and navigate economic fluctuations.

Strategic Expansion

Expanding private credit capabilities positions Morningstar to capture new market opportunities, enhancing its revenue streams and competitive edge.

Negative Factors

Organic Growth Slowdown

A slowdown in organic growth could impact Morningstar's market positioning and revenue potential, necessitating strategic adjustments to sustain growth.

Increased Costs

Rising costs can pressure profit margins and reduce financial flexibility, potentially affecting Morningstar's ability to invest in growth initiatives.

Free Cash Flow Decline

A decline in free cash flow may limit Morningstar's ability to fund new projects and return capital to shareholders, impacting long-term growth prospects.

Morningstar Business Overview & Revenue Model

Company Description

Morningstar, Inc. (MORN) is a leading provider of independent investment research, offering a wide range of products and services to help investors make informed financial decisions. Founded in 1984 and headquartered in Chicago, the company operates in the financial services sector, focusing primarily on investment research, data, and analytics. Morningstar provides a variety of services including investment management, research and analysis on stocks, mutual funds, exchange-traded funds (ETFs), and other investment vehicles, as well as software solutions for financial advisors and institutions.

How the Company Makes Money

Morningstar generates revenue through several key streams. The primary source of revenue comes from its Research and Data segment, which includes subscriptions to its investment research platforms and analytics tools used by individual investors, financial advisors, and institutional clients. Additionally, the company earns fees from its Investment Management segment, where it manages assets on behalf of clients, including mutual funds and separate accounts. Another significant revenue stream arises from Morningstar Direct, a software platform that provides investment management and research data to institutional investors. Furthermore, Morningstar benefits from partnerships with various financial institutions, enhancing its distribution channels and client base. The combination of subscription fees, asset management fees, and data licensing contributes to its overall revenue model.

Morningstar Financial Statement Overview

Summary

Morningstar showcases a well-rounded financial performance with strong revenue and profit growth, efficient cost management, and robust cash flow generation. The balance sheet is stable with moderate leverage and a solid equity base. Despite a decrease in free cash flow, it remains strong, supporting ongoing operations and investments.

Income Statement

Morningstar's financial performance is strong, with consistent revenue growth and impressive profitability. The TTM gross profit margin stands at 60.93%, showcasing efficient cost management. The net profit margin for the TTM is robust at 17.22%, reflecting solid bottom-line performance. Revenue growth has been steady, with a TTM increase of 3.18% compared to the previous year, indicating a healthy upward trajectory. EBIT and EBITDA margins are strong, indicating good operational efficiency.

Balance Sheet

The balance sheet shows a stable financial position with a debt-to-equity ratio of 0.64, indicating moderate leverage. The return on equity for the TTM is 25.03%, highlighting effective utilization of shareholder funds. The equity ratio is 44.47%, reflecting a healthy equity buffer. Overall, Morningstar maintains a solid balance between debt and equity, with potential room for further leverage if needed.

Cash Flow

Morningstar exhibits a strong cash flow position, with a free cash flow of $389.8 million in the TTM. The operating cash flow to net income ratio is 1.32, indicating effective cash generation relative to net income. Free cash flow has declined compared to the previous year, with a decrease of 13.16%, but remains positive and substantial. The company demonstrates effective cash management, ensuring sufficient liquidity for operations and investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.35B	2.28B	2.04B	1.87B	1.70B	1.39B
Gross Profit	1.43B	1.38B	1.20B	1.09B	1.00B	833.10M
EBITDA	755.80M	714.20M	419.70M	323.70M	417.00M	433.90M
Net Income	404.10M	369.90M	141.10M	70.50M	193.30M	223.60M
Balance Sheet
Total Assets	3.63B	3.55B	3.40B	3.47B	2.86B	2.70B
Cash, Cash Equivalents and Short-Term Investments	541.60M	551.00M	389.00M	414.60M	546.10M	464.20M
Total Debt	1.03B	904.00M	1.16B	1.32B	531.50M	626.70M
Total Liabilities	2.02B	1.93B	2.08B	2.27B	1.45B	1.42B
Stockholders Equity	1.61B	1.62B	1.33B	1.21B	1.42B	1.27B
Cash Flow
Free Cash Flow	389.80M	448.90M	197.30M	168.30M	348.10M	307.60M
Operating Cash Flow	535.30M	591.60M	316.40M	297.80M	449.90M	384.30M
Investing Cash Flow	-56.40M	-21.30M	-81.90M	-799.30M	-167.70M	-123.80M
Financing Cash Flow	-391.90M	-384.40M	-278.40M	415.10M	-211.80M	-182.20M

Morningstar Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 235.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MORN, the sentiment is Negative. The current price of 235.16 is below the 20-day moving average (MA) of 254.78, below the 50-day MA of 265.57, and below the 200-day MA of 299.29, indicating a bearish trend. The MACD of -7.02 indicates Positive momentum. The RSI at 27.95 is Positive, neither overbought nor oversold. The STOCH value of 14.38 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MORN.

Morningstar Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCO	71 Outperform	86.24B	40.86	53.99%	0.76%	11.47%	16.14%
FDS	69 Neutral	10.93B	18.59	24.73%	1.48%	5.39%	11.56%
SPGI	69 Neutral	154.84B	38.98	11.98%	0.75%	10.72%	23.30%
MSCI	69 Neutral	43.31B	37.08	-133.00%	1.25%	10.48%	0.98%
MORN	66 Neutral	$9.92B	25.02	26.51%	0.75%	8.23%	64.35%
VALU	65 Neutral	357.31M	16.82	20.63%	3.29%	-4.99%	6.15%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Morningstar Corporate Events

Morningstar Announces Leadership Change in Direct Platform

Morningstar announced that James Rhodes, President of Direct Platform, will be leaving the company on September 12, 2025, with Frannie Besztery stepping in as interim head. The company also reported a significant increase in Morningstar Data revenue in Q2 2025, driven by managed products data and a large data contract, highlighting its growth in the financial data segment.

Morningstar Releases Investor Q&A Report on Operations

Morningstar released an Investor Q&A report addressing questions received through July 15, 2025, detailing aspects of their operations and revenue models. The report highlights the company’s integrated approach to client engagement, cross-selling strategies, and revenue composition, emphasizing recurring revenue in structured finance and fundamental ratings. It also discusses the monetization of investment data, retention rates, and plans for Morningstar Medalist ratings for interval funds. The report outlines the proprietary nature of their data collection for fund ratings and notes the mature market status of their Morningstar Direct Platform, while also indicating potential growth through data and analytics enhancements.

Morningstar Reports Q2 2025 Financial Results

On July 30, 2025, Morningstar, Inc. reported its financial results for the second quarter of 2025, highlighting a 5.8% increase in revenue to $605.1 million compared to the previous year. The company saw significant contributions from its PitchBook, Morningstar Direct Platform, and Morningstar Credit segments. Despite a decrease in cash flow, Morningstar achieved a 15.3% rise in operating income and a 30.6% increase in diluted net income per share. The report also noted challenges such as increased compensation costs and marketing expenses, as well as risks related to cybersecurity, economic conditions, and regulatory changes.

Morningstar Expands Private Credit Capabilities Amid Growth Slowdown

Morningstar‘s recent report highlights the company’s strategic focus on expanding its private credit capabilities, which are projected to significantly contribute to its revenue growth across various segments. The report also addresses a slowdown in organic growth for the Morningstar Direct Platform, attributed to factors such as slower license growth, loss of a major client, and strategic shifts in product offerings, impacting the company’s operational performance and market positioning.

Morningstar Declares Quarterly Dividend for Shareholders

On June 20, 2025, Morningstar, Inc. announced that its Board of Directors approved a quarterly cash dividend of 45.5 cents per share, which will be payable on July 31, 2025, to shareholders of record as of July 11, 2025. This decision reflects the company’s ongoing commitment to returning value to its shareholders and maintaining its financial stability, despite the various risks and uncertainties outlined in their forward-looking statements.