Moody's (MCO) AI Stock Analysis

• Market Cap: $89.03B
• Dividend Yield: 0.75%
• Average Volume (3M): 746.34K
• Price to Earnings (P/E): 40.1
• Beta (1Y): 1.07
• Revenue Growth: 8.77%
• EPS Growth: 13.62%
• Country: US
• Employees: 15,795
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 3.92
• Shares Outstanding: 178,400,000
• 10 Day Avg. Volume: 844,743
• 30 Day Avg. Volume: 746,341
• PEG Ratio: 1.44
• Price to Book (P/B): 24.14
• Price to Sales (P/S): 12.14
• P/FCF Ratio: 34.14
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 12.11
• Enterprise Value/Gross Profit: 17.95
• Enterprise Value/Ebitda: 24.98
• 1Y Price Target: $546.93
• Price Target Upside: 9.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17
• EPS Forecast (FY): 14.63
• Revenue Forecast (FY): $7.67B

• Rating: 77 Outperform
• Price Target: $564.00 ▲(13.32% Upside)

Moody's overall stock score reflects strong financial performance and positive earnings call sentiment, indicating robust growth and operational efficiency. The technical analysis supports a bullish outlook, though caution is advised due to high valuation and potential overbought conditions. The high debt level remains a risk factor.

Positive Factors

Revenue Growth

Consistent revenue growth underscores Moody's expanding market presence and effective business strategy, supporting long-term financial health.

Strategic Partnerships

The partnership with Pegasystems enhances Moody's service offerings, potentially increasing market reach and customer base, supporting sustainable growth.

Operational Efficiency

Improved operating margins reflect Moody's ability to manage costs effectively, enhancing profitability and competitive positioning over the long term.

Negative Factors

High Debt Levels

High leverage can limit financial flexibility and increase risk, potentially impacting Moody's ability to invest in growth opportunities.

Insurance ARR Slowdown

A slowdown in insurance ARR growth could signal challenges in maintaining growth momentum in this segment, affecting future revenue streams.

Repricing Activity Challenges

Challenges with repricing activity may indicate potential revenue volatility, affecting Moody's ability to capitalize on market opportunities efficiently.

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 generates revenue primarily through two key segments: Moody's Investors Service and Moody's Analytics. In the MIS segment, the company earns money by providing credit ratings and research services to a diverse range of clients including corporations, governments, and financial institutions. This segment relies heavily on fees charged for ratings, which are paid by the issuers of the debt being rated. In the MA segment, Moody's makes money by selling software, data, and analytical services to organizations, helping them assess risk and improve decision-making. The company also benefits from recurring revenue streams through subscription-based services and licenses for its data and analytical tools. Additionally, strategic partnerships with financial institutions and investment firms enhance its market presence and contribute to revenue growth by expanding its customer base and service offerings.

Moody's Financial Statement Overview

Summary

Moody's demonstrates strong financial performance with robust revenue growth, high profitability margins, and efficient cash generation. While leverage is moderate, the company's strong cash flow provides a cushion against potential risks.

Income Statement

Moody's has demonstrated strong financial performance with a notable increase in revenue, evidenced by a revenue growth rate of 3.1% from the previous year. The Gross Profit Margin remains robust at approximately 71.3% for the TTM, indicating efficient cost management. Net Profit Margin stands at 29.2%, showcasing solid profitability. While EBIT and EBITDA margins are healthy at 40.5% and 44.8% respectively, indicating effective operational control, a slight decline in EBITDA margin compared to the previous year suggests a need for cautious monitoring.

Balance Sheet

The balance sheet reflects a sound financial position, with a Debt-to-Equity Ratio of 1.84 indicating a moderate level of leverage relative to industry standards. Return on Equity is strong at 54.0%, driven by high profitability. However, the Equity Ratio of 25.5% suggests a reliance on debt financing, which could pose a risk if market conditions change unfavorably. Overall, the company has maintained stability with a growing equity base.

Cash Flow

Moody's exhibits impressive cash flow metrics with a strong Operating Cash Flow to Net Income Ratio of 1.26, indicating efficient cash generation relative to profits. Free Cash Flow remains robust, although it showed a slight decrease from the previous year by 3.0%. The Free Cash Flow to Net Income Ratio of 1.15 further highlights the company's ability to convert income into cash, supporting sustainable operations and potential growth initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.50B	7.09B	5.92B	5.47B	6.22B	5.37B
Gross Profit	5.06B	4.71B	3.85B	3.52B	4.32B	3.68B
EBITDA	3.64B	3.33B	2.52B	2.31B	3.25B	2.68B
Net Income	2.24B	2.06B	1.61B	1.37B	2.21B	1.78B
Balance Sheet
Total Assets	15.41B	15.51B	14.62B	14.35B	14.68B	12.41B
Cash, Cash Equivalents and Short-Term Investments	2.26B	2.97B	2.19B	1.86B	1.90B	2.70B
Total Debt	7.64B	7.75B	7.42B	7.86B	7.97B	6.94B
Total Liabilities	11.30B	11.78B	11.15B	11.66B	11.76B	10.65B
Stockholders Equity	3.96B	3.56B	3.32B	2.52B	2.73B	1.57B
Cash Flow
Free Cash Flow	2.64B	2.52B	1.88B	1.19B	1.87B	2.04B
Operating Cash Flow	2.72B	2.84B	2.15B	1.47B	2.00B	2.15B
Investing Cash Flow	-137.00M	-1.06B	-247.00M	-262.00M	-2.62B	-1.10B
Financing Cash Flow	-3.09B	-1.45B	-1.58B	-1.21B	-122.00M	-328.00M

Moody's Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 497.69
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 497.69 is above the 20-day moving average (MA) of 487.57, above the 50-day MA of 483.51, and above the 200-day MA of 480.15, indicating a bullish trend. The MACD of 2.88 indicates Negative momentum. The RSI at 59.56 is Neutral, neither overbought nor oversold. The STOCH value of 79.05 is Neutral, 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	80 Outperform	$11.08B	18.84	28.83%	1.59%	5.88%	12.18%
MCO	77 Outperform	$89.03B	40.12	57.08%	0.75%	8.77%	13.62%
MORN	76 Outperform	$8.80B	24.32	24.42%	0.84%	7.76%	15.92%
SPGI	73 Outperform	$154.61B	37.12	12.57%	0.76%	9.04%	21.35%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
DNB	63 Neutral	―	―	―	―	1.97%	-14.06%
MSCI	62 Neutral	$41.42B	34.94	―	1.28%	9.02%	3.45%

Moody's Corporate Events

Moody’s Reports Strong Q3 2025 Financial Results

Moody’s Corporation reported strong financial results for the third quarter of 2025, with a revenue increase of 11% to $2.0 billion, driven by significant growth in both Moody’s Analytics and Moody’s Investors Service. The company also achieved a 23% increase in diluted EPS, reflecting robust operational performance and strategic investments. The results underscore Moody’s ability to leverage its franchise for growth, with record revenues in its MIS segment and a strategic shift towards subscription-based solutions in MA contributing to its financial success. The company has raised its guidance for the full year, projecting adjusted diluted EPS growth of 17% at the midpoint, highlighting its strong earnings engine and financial flexibility to pursue growth opportunities.

Moody’s Updates By-Laws for Stockholder Proposals

On October 14, 2025, Moody’s Corporation’s Board of Directors approved amendments to the company’s By-Laws, updating procedural and disclosure requirements for director nominations and business proposals by stockholders. These changes, effective immediately, aim to modernize and clarify the advance notice provisions, expanding the timeframe and information requirements for stockholder submissions, and addressing procedural aspects of stockholder meetings. The amendments also set specific deadlines for submissions related to the 2026 Annual Meeting of Stockholders, ensuring compliance with applicable laws and the updated By-Laws.