Moody's (MCO) AI Stock Analysis

• Market Cap: $89.93B
• Dividend Yield: 0.75%
• Average Volume (3M): 643.17K
• Price to Earnings (P/E): 43.2
• Beta (1Y): 1.20
• Revenue Growth: 15.95%
• EPS Growth: 26.38%
• Country: US
• Employees: 15,795
• Sector: Financial
• Sector Strength: 78
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 3.83
• Shares Outstanding: 179,900,000
• 10 Day Avg. Volume: 722,978
• 30 Day Avg. Volume: 643,170
• PEG Ratio: 15.49
• Price to Book (P/B): 24.17
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 35.81
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 3.39
• Enterprise Value/Gross Profit: 18.68
• Enterprise Value/Ebitda: 7.76
• 1Y Price Target: $508.08
• Price Target Upside: 1.64% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 76 Outperform
• Price Target: $566.00 ▲(13.22%Upside)

Moody's stock score is bolstered by strong financial performance and positive earnings call highlights, indicating robust growth and strategic advancements. However, the high valuation and external challenges warrant caution. The stock shows stable technical indicators, supporting a favorable investment outlook.

Positive Factors

Private Credit Market Positioning

The company is well-positioned in private credit with continued growth and margin expansion across the enterprise.

Strong Financial Performance

The first quarter results were good, with revenue 8% above consensus and an adjusted EBITDA margin of 51.7%, which was higher than expected.

Negative Factors

Issuance Guidance

Management lowered 2025 issuance guidance due to slowness observed, reflecting a more cautious outlook for the year.

Macroeconomic Uncertainty

There is a risk that clients delay decision-making due to recent macro uncertainty and market volatility.

Moody's Business Overview & Revenue Model

Company Description

Moody's Corporation (MCO) is a global integrated risk assessment firm that empowers organizations to make better decisions. The company primarily operates through two segments: Moody's Investors Service (MIS), which provides credit ratings, research, and risk analysis; and Moody's Analytics (MA), which offers software, advisory services, and research for financial risk management. Headquartered in New York City, Moody's is a prominent player in the financial services sector, known for its expertise in credit ratings, risk assessment, and data analytics.

How the Company Makes Money

Moody's Corporation generates revenue through its two main business segments, Moody's Investors Service (MIS) and Moody's Analytics (MA). MIS is the company's largest revenue source, generating money by providing credit ratings and research. Issuers of debt securities, such as corporations, municipalities, and governments, pay Moody's to rate their creditworthiness, which is essential for the issuers to access capital markets. Additionally, investors and financial institutions subscribe to Moody's research and analysis for informed decision-making. The Moody's Analytics segment earns revenue by offering a suite of products and services, including risk management software, economic research, and advisory services, to financial institutions and corporations. Moody's also benefits from strategic partnerships that enhance its product offerings and expand its market reach, contributing to its overall earnings.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.09B	5.92B	5.47B	6.22B	5.37B
Gross Profit	5.14B	4.23B	3.85B	4.58B	3.90B
EBITDA	3.33B	2.61B	2.33B	3.09B	2.66B
Net Income	2.06B	1.61B	1.37B	2.21B	1.78B
Balance Sheet
Total Assets	15.51B	14.62B	14.35B	14.68B	12.41B
Cash, Cash Equivalents and Short-Term Investments	2.97B	2.19B	1.86B	1.90B	2.70B
Total Debt	7.75B	7.42B	474.00M	560.00M	521.00M
Total Liabilities	11.78B	11.15B	14.35B	11.76B	10.65B
Stockholders Equity	3.56B	3.32B	2.52B	2.92B	1.76B
Cash Flow
Free Cash Flow	2.52B	1.88B	1.19B	1.87B	2.04B
Operating Cash Flow	2.84B	2.15B	1.47B	2.00B	2.15B
Investing Cash Flow	-1.06B	-247.00M	-262.00M	-2.62B	-1.08B
Financing Cash Flow	-1.45B	-1.58B	-1.21B	-122.00M	-351.00M

Moody's Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 499.90
• 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 499.9 is above the 20-day moving average (MA) of 495.14, above the 50-day MA of 485.95, and above the 200-day MA of 474.48, indicating a bullish trend. The MACD of 5.66 indicates Positive momentum. The RSI at 55.89 is Neutral, neither overbought nor oversold. The STOCH value of 55.04 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
SPGI	80 Outperform	$160.83B	41.17	11.68%	0.73%	12.98%	42.72%
MORN	77 Outperform	$12.19B	32.39	25.68%	0.63%	10.11%	79.71%
MCO	76 Outperform	$89.93B	43.19	57.90%	0.75%	15.95%	26.38%
FDS	73 Outperform	$16.34B	31.21	26.35%	1.22%	5.07%	4.19%
MSCI	72 Outperform	$44.72B	39.74	-117.99%	1.45%	11.67%	-0.89%
Sector *	64 Neutral	$6.61B	11.28	7.19%	5.75%	24.10%	5.12%
DNB	62 Neutral	$4.06B	―	-0.64%	2.20%	2.52%	42.27%

Moody's Corporate Events

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.

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.