Moody's (MCO) AI Stock Analysis

• Market Cap: $92.44B
• Dividend Yield: 0.69%
• Average Volume (3M): 785.04K
• Price to Earnings (P/E): 43.8
• Beta (1Y): 1.19
• Revenue Growth: 11.47%
• EPS Growth: 16.14%
• Country: US
• Employees: 15,795
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 3.56
• Shares Outstanding: 179,400,000
• 10 Day Avg. Volume: 848,775
• 30 Day Avg. Volume: 785,038
• 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: 1.03
• Enterprise Value/Revenue: 13.07
• Enterprise Value/Gross Profit: 17.96
• Enterprise Value/Ebitda: 26.99
• 1Y Price Target: $545.93
• Price Target Upside: 5.95% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 79 Outperform
• Price Target: $587.00 ▲(13.92% Upside)

Moody's overall score is driven by strong financial performance and positive earnings call sentiment, highlighting growth in analytics and strategic investments. Technical indicators show bullish momentum but caution is advised due to valuation concerns and overbought signals.

Positive Factors

Financial Performance

Moody’s second-quarter results came in nicely above expectations, with revenue exceeding both the model and Street predictions.

Market Positioning

MCO is well-positioned to capitalize on the growth in private credit, benefiting from a major capital shift from bank balance sheets to private credit markets.

Private Credit Growth

Private credit represented roughly 25% of first-time mandates, with the number of deals up 50% year-over-year and private credit revenues up 75%.

Negative Factors

Client Purchasing Behavior

Moody's Analytics business is experiencing issues as clients tighten purchasing patterns.

Issuance Outlook

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

Macroeconomic Uncertainty

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

Moody's Business Overview & Revenue Model

Company Description

Moody's Corporation (MCO) is a global integrated risk assessment firm that provides credit ratings, research, tools, and solutions for businesses and investors. The company operates primarily through two segments: Moody's Investors Service (MIS), which offers credit ratings, research, and risk analysis, and Moody's Analytics (MA), which delivers financial intelligence and analytical tools to help clients make informed decisions. Moody's serves a diverse clientele, including governments, corporations, financial institutions, and investors across various sectors.

How the Company Makes Money

Moody's generates revenue through several key streams. The largest portion comes from its Moody's Investors Service segment, where the company earns fees for providing credit ratings and research on debt securities and issuers. This segment benefits from the ongoing demand for independent credit assessments, especially during periods of market volatility. The Moody's Analytics segment contributes to revenue by offering subscription-based access to proprietary data, analytical tools, and software solutions. This segment targets financial professionals seeking to mitigate risk and enhance decision-making. Additionally, Moody's has formed strategic partnerships and collaborations with financial institutions and technology firms, enhancing its service offerings and expanding its customer base. Overall, Moody's revenue model is supported by a combination of transactional fees, subscription services, and value-added analytics, allowing the company to leverage its expertise in risk assessment and financial insights.

Moody's Financial Statement Overview

Summary

Moody's demonstrates strong financial performance with solid revenue and profit margins. The company manages costs efficiently, maintaining a robust gross profit margin of 71.3% and a net profit margin of 29.2%. Cash flow metrics are impressive, though a reliance on debt financing poses a potential risk.

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	7.31B	7.09B	5.92B	5.47B	6.22B	5.37B
Gross Profit	5.32B	5.14B	4.23B	3.85B	4.58B	3.90B
EBITDA	3.54B	3.47B	2.61B	2.33B	3.25B	2.66B
Net Income	2.13B	2.06B	1.61B	1.37B	2.21B	1.78B
Balance Sheet
Total Assets	15.49B	15.51B	14.62B	14.35B	14.68B	12.41B
Cash, Cash Equivalents and Short-Term Investments	2.29B	2.97B	2.19B	1.86B	1.90B	2.70B
Total Debt	7.28B	7.75B	7.42B	7.86B	7.97B	6.94B
Total Liabilities	11.38B	11.78B	11.15B	11.66B	11.76B	10.65B
Stockholders Equity	3.95B	3.56B	3.32B	2.52B	2.73B	1.57B
Cash Flow
Free Cash Flow	2.45B	2.52B	1.88B	1.19B	1.87B	2.04B
Operating Cash Flow	2.68B	2.84B	2.15B	1.47B	2.00B	2.15B
Investing Cash Flow	-767.00M	-1.06B	-247.00M	-262.00M	-2.62B	-1.08B
Financing Cash Flow	-2.50B	-1.45B	-1.58B	-1.21B	-122.00M	-351.00M

Moody's Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 515.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 515.29 is above the 20-day moving average (MA) of 508.23, above the 50-day MA of 495.54, and above the 200-day MA of 477.39, indicating a bullish trend. The MACD of 5.96 indicates Positive momentum. The RSI at 57.51 is Neutral, neither overbought nor oversold. The STOCH value of 72.99 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
MCO	79 Outperform	$92.44B	43.79	55.18%	0.69%	11.47%	16.14%
SPGI	77 Outperform	$170.01B	42.80	11.76%	0.67%	10.72%	23.30%
FDS	73 Outperform	$14.46B	27.60	26.35%	1.10%	5.07%	4.19%
MSCI	71 Outperform	$42.29B	36.22	-117.99%	1.24%	10.48%	0.98%
MORN	66 Neutral	$10.92B	27.55	26.51%	0.68%	8.23%	64.35%
Sector *	65 Neutral	£5.42B	8.81	9.53%	5.11%	10.07%	-13.05%
DNB	61 Neutral	$4.07B	―	-0.64%	2.20%	2.52%	42.27%

Moody's Corporate Events

Moody’s Reports 4% Revenue Increase in Q2 2025

Moody’s Corporation reported a 4% increase in second-quarter 2025 revenue, reaching $1.9 billion, with Moody’s Analytics showing an 11% growth and Moody’s Investors Service remaining flat. The company highlighted strong recurring revenue growth and efficiency initiatives, leading to an updated full-year adjusted diluted EPS guidance, reflecting a 10% growth at the midpoint. Despite a decline in issuance, Moody’s Investors Service maintained its revenue through favorable revenue mix and growth in structured finance and public finance sectors.

The most recent analyst rating on (MCO) stock is a Buy with a $525.00 price target. To see the full list of analyst forecasts on Moody’s stock, see the MCO Stock Forecast page.

Moody’s Expands Board with New Director Appointment

On July 16, 2025, Moody’s Corporation announced the election of Sumit Dhawan to its Board of Directors, expanding the board from nine to ten members. Mr. Dhawan, who has extensive experience in cybersecurity and cloud computing, will also serve on the Governance & Nominating and Compensation & Human Resources Committees. His appointment is expected to bring valuable insights and strategic vision to Moody’s, enhancing its ability to meet evolving customer needs.

The most recent analyst rating on (MCO) stock is a Buy with a $500.00 price target. To see the full list of analyst forecasts on Moody’s stock, see the MCO Stock Forecast page.