Moody's (MCO) AI Stock Analysis

• Market Cap: $86.78B
• Dividend Yield: 0.78%
• Average Volume (3M): 905.86K
• Price to Earnings (P/E): 39.1
• Beta (1Y): 1.12
• 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: 879,077
• 30 Day Avg. Volume: 905,857
• 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: 1.05
• Enterprise Value/Revenue: 12.11
• Enterprise Value/Gross Profit: 17.95
• Enterprise Value/Ebitda: 24.98
• 1Y Price Target: $540.54
• Price Target Upside: 12.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 14.57
• Revenue Forecast (FY): $7.66B

• Rating: 72 Outperform
• Price Target: $524.00 ▲(8.67% Upside)

Moody's overall stock score is driven by strong financial performance and a positive earnings call, which highlight robust revenue growth and operational efficiency. However, the high P/E ratio and technical indicators suggest caution, as the stock may be overvalued and facing bearish momentum. The company's high leverage is also a risk factor to monitor.

Positive Factors

Revenue Growth

Record revenue growth indicates strong market demand and effective business strategies, supporting long-term financial health and expansion.

AI Integration

Successful AI integration enhances Moody's product offerings, improving operational efficiency and competitive positioning in the financial sector.

Operating Margin

Improved operating margins reflect enhanced cost management and operational efficiency, contributing to sustained profitability and shareholder value.

Negative Factors

High Debt Levels

Significant leverage poses a risk to financial stability, potentially limiting flexibility in capital allocation and increasing vulnerability to economic downturns.

Insurance ARR Slowdown

Slowing ARR growth in the insurance sector may indicate challenges in maintaining momentum, affecting future revenue streams and market competitiveness.

Repricing Activity Challenges

Challenges in repricing activity could impact revenue growth and profitability, highlighting potential issues in adapting to market dynamics and client needs.

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 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: Negative
• Last Price: 482.21
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 482.21 is above the 20-day moving average (MA) of 480.92, below the 50-day MA of 488.47, and below the 200-day MA of 482.83, indicating a neutral trend. The MACD of -0.67 indicates Negative momentum. The RSI at 48.73 is Neutral, neither overbought nor oversold. The STOCH value of 57.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MCO.

Moody's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SPGI	73 Outperform	$150.52B	36.14	12.57%	0.76%	9.04%	21.35%
MCO	72 Outperform	$86.78B	39.11	57.08%	0.78%	8.77%	13.62%
FDS	70 Outperform	$9.78B	16.79	29.13%	1.64%	5.39%	11.56%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
MSCI	66 Neutral	$43.20B	36.44	―	1.18%	9.02%	3.45%
MORN	64 Neutral	$8.74B	24.17	24.42%	0.86%	7.76%	15.92%
DNB	63 Neutral	―	―	―	―	1.97%	-14.06%

Moody's Corporate Events

Moody’s Reports Strong Q3 2025 Earnings Growth

Moody’s Corporation is a global integrated risk assessment firm that provides credit ratings, research, tools, and analysis to financial markets. The company operates primarily in the financial services sector, offering insights and innovative technologies to help customers make informed decisions.

Moody’s Reports Record Q3 Revenue and Earnings Growth

Moody’s Corporation has reported a robust third quarter, showcasing record revenue and earnings growth. The sentiment during the earnings call was overwhelmingly positive, with the company highlighting significant gains in both its MIS and Analytics divisions. Despite the strong performance, challenges such as repricing activity and a slowdown in insurance ARR growth were acknowledged.

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.

The most recent analyst rating on (MCO) stock is a Buy with a $550.00 price target. To see the full list of analyst forecasts on Moody’s stock, see the MCO Stock Forecast page.

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.

The most recent analyst rating on (MCO) stock is a Hold with a $521.00 price target. To see the full list of analyst forecasts on Moody’s stock, see the MCO Stock Forecast page.