Moody's Corp. (MCO)
NYSE:MCO
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Moody's
(NYSE:MCO)
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Rating:76Outperform
Price Target:
$519.00
▲(13.98% Upside)
Action:ReiteratedDate:04/22/26
The score is driven by strong financial performance (high margins and robust free cash flow) and a positive earnings-call backdrop (maintained guidance, margin expansion, and stepped-up buybacks). Offsetting factors are a premium valuation and a mixed longer-term technical trend despite improving near-term momentum.
Positive Factors
High margins and strong cash generation
Sustained high margins and near-complete cash conversion (~97%) create durable internal funding for R&D, AI investments and elevated buybacks without immediate reliance on external capital. This strengthens resilience across issuance cycles and supports long-term shareholder returns.
Negative Factors
Elevated financial leverage
Meaningful leverage amplifies returns but reduces balance-sheet flexibility and increases sensitivity to interest-rate or earnings shocks. High absolute debt constrains optionality for large M&A or sustained buybacks if free cash flow weakens during issuance downturns.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins and strong cash generation
Sustained high margins and near-complete cash conversion (~97%) create durable internal funding for R&D, AI investments and elevated buybacks without immediate reliance on external capital. This strengthens resilience across issuance cycles and supports long-term shareholder returns.
Read all positive factors
Moody's (MCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$78.85B
Dividend Yield0.73%
Average Volume (3M)1.11M
Price to Earnings (P/E)29.2
Beta (1Y)1.08
Revenue Growth8.95%
EPS Growth20.40%
CountryUS
Employees15,795
SectorFinancial
Sector Strength70
IndustryFinancial - Data & Stock Exchanges
Share Statistics
EPS (TTM)14.00
Shares Outstanding174,700,000
10 Day Avg. Volume880,628
30 Day Avg. Volume1,114,609
Financial Highlights & Ratios
PEG Ratio1.75
Price to Book (P/B)22.57
Price to Sales (P/S)11.85
P/FCF Ratio35.53
Enterprise Value/Market Cap1.07
Enterprise Value/Revenue10.76
Enterprise Value/Gross Profit15.43
Enterprise Value/Ebitda21.44
Forecast
1Y Price Target
$537.85Price Target Upside18.12% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering18
EPS Forecast (FY)16.71
Revenue Forecast (FY)$8.24B
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 serv...
How the Company Makes Money
Moody’s makes money mainly by charging for (1) credit rating services and (2) subscriptions and fees for data, software, and advisory solutions.
1) Moody’s Investors Service (MIS) – credit ratings and related services
- Issuer-paid ratings fees: ...
Moody's Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyMoody's Earnings Call Summary
Earnings Call Date:Apr 22, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 28, 2026
Earnings Call Sentiment Positive
The call highlighted strong top-line growth in both Ratings and Analytics, meaningful margin expansion (company margin +150 bps; MA +250 bps; MIS margin 66.7%), robust cash generation (+26% free cash flow) and aggressive capital returns, alongside notable client wins, ARR growth (ARR $3.6B, +8% YoY) and strategic AI and digital-asset initiatives. Offsetting risks include a large decline in MA transactional revenue due to divestitures, persistent market volatility that could compress issuance and revenue timing, regulatory scrutiny around AI decisioning that may slow adoption, and expected seasonal/second-half softening in issuance. On balance, the positive operating and financial momentum, strong cash returns and visible ARR/recurring revenue traction materially outweigh the identified near-term headwinds.Positive Updates
Strong Financial Performance and Margin Expansion
Company-level adjusted operating margin rose 150 basis points to 53.2%. Adjusted diluted EPS was $4.33, up 13% year-over-year. Free cash flow was $844 million, up 26% year-over-year.
Negative Updates
Significant Decline in MA Transactional Revenue
MA transactional revenue declined materially (down ~54% year-over-year), driven by the learning divestiture and deliberate repositioning away from transactional services; Q1 transactional revenue reached a low run rate (~$17M reported). Management expects this drag to persist through 2026.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Financial Performance and Margin Expansion
Company-level adjusted operating margin rose 150 basis points to 53.2%. Adjusted diluted EPS was $4.33, up 13% year-over-year. Free cash flow was $844 million, up 26% year-over-year.
Read all positive updates
Company Guidance
Moody's held its full‑year guidance while adding quarterly detail: Q2 MIS revenue is expected to grow in the low‑to‑mid‑teens with adjusted diluted EPS of about $4.15–$4.30, under a base case that assumes market turbulence is largely contained to April and issuance recovers in Q2–Q3 (if volatility persists, MIS full‑year revenue growth could moderate to mid‑single digits and EPS trend to the low end of the range). Management reiterated MCO full‑year revenue growth in the high single‑digit percent range (now expected toward the lower end after the Regulatory Solutions sale), and Q1 free cash flow was $844M (+26% YoY) with ~$1.7B returned to shareholders (including ~$1.5B of buybacks); buyback guidance was raised by $500M to ~ $2.5B and the company remains on track to return ~110% of FCF by year‑end. MA ARR ended Q1 at $3.6B (+8% YoY) with ARR and organic recurring revenue growth anchored in the high single digits; MA revenue grew 8% (6% organic CC), recurring revenue +11% (7% organic CC) while transactional revenue declined ~54% YoY, MA adjusted operating margin was 32.5% in Q1 with a full‑year target of 34–35% and a path to mid‑to‑high‑30s by end‑2027 (modest Q2 step‑up and stronger H2 ramp). Additional modeling notes: MIS Q1 adjusted operating margin was 66.7%; MCO expects Q2 adjusted operating margins above the midpoint of the full‑year range, Q2 expenses broadly in line with Q1 (ex‑restructuring), and a Q2 tax rate at the high end of the 23–25% full‑year range.Moody's Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
68
Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.87B | 7.72B | 7.09B | 5.92B | 5.47B | 6.22B |
| Gross Profit | 5.49B | 5.26B | 4.71B | 3.85B | 3.52B | 4.32B |
| EBITDA | 3.95B | 3.94B | 3.33B | 2.52B | 2.31B | 3.25B |
| Net Income | 2.50B | 2.46B | 2.06B | 1.61B | 1.37B | 2.21B |
Balance Sheet | ||||||
| Total Assets | 14.73B | 15.83B | 15.51B | 14.62B | 14.35B | 14.68B |
| Cash, Cash Equivalents and Short-Term Investments | 1.51B | 2.45B | 2.97B | 2.19B | 1.86B | 1.90B |
| Total Debt | 7.31B | 7.35B | 7.75B | 7.42B | 7.86B | 7.97B |
| Total Liabilities | 11.59B | 11.63B | 11.78B | 11.15B | 11.66B | 11.76B |
| Stockholders Equity | 2.99B | 4.05B | 3.56B | 3.32B | 2.52B | 2.73B |
Cash Flow | ||||||
| Free Cash Flow | 2.99B | 2.58B | 2.52B | 1.88B | 1.19B | 1.87B |
| Operating Cash Flow | 3.08B | 2.90B | 2.84B | 2.15B | 1.47B | 2.00B |
| Investing Cash Flow | -313.00M | 2.00M | -1.06B | -247.00M | -262.00M | -2.62B |
| Financing Cash Flow | -3.48B | -3.06B | -1.45B | -1.58B | -1.21B | -122.00M |
Moody's Technical Analysis
Positive
455.35
Price Trends
443.37
Positive
474.78
Negative
484.20
Negative
Market Momentum
-0.26
Negative
57.26
Neutral
79.93
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 455.35 is above the 20-day moving average (MA) of 438.06, above the 50-day MA of 443.37, and below the 200-day MA of 484.20, indicating a neutral trend. The MACD of -0.26 indicates Negative momentum. The RSI at 57.26 is Neutral, neither overbought nor oversold. The STOCH value of 79.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCO.
Moody's Risk Analysis
Moody's disclosed 18 risk factors in its most recent earnings report. Moody's reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Moody's Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $8.15B | 15.04 | 27.22% | 1.49% | 6.51% | 9.85% | |
77 Outperform | $42.62B | 24.33 | -74.96% | 1.24% | 10.86% | 20.25% | |
76 Outperform | $78.85B | 29.17 | 66.74% | 0.73% | 8.95% | 20.40% | |
76 Outperform | $124.36B | 22.66 | 13.84% | 0.73% | 8.54% | 24.07% | |
69 Neutral | $6.72B | 15.43 | 30.01% | 0.84% | 8.39% | 10.06% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
MCO
Moody's
451.32
-31.92
-6.61%
FDS
Factset Research
223.61
-226.26
-50.29%
SPGI
S&P Global
420.12
-94.17
-18.31%
MORN
Morningstar
176.70
-129.95
-42.38%
MSCI
MSCI
585.42
24.02
4.28%
Moody's Corporate Events
Business Operations and StrategyExecutive/Board ChangesStock BuybackDividendsFinancial Disclosures
Moody’s Delivers Record Q1 2026 Results, Boosts Buybacks
Positive
Apr 22, 2026
Moody’s Corporation reported record first-quarter 2026 results on April 22, with revenue rising 8% year-on-year to $2.1 billion and adjusted operating margin expanding to 53.2%. Diluted EPS grew 8%, adjusted EPS climbed 13%, and free cash fl...
Executive/Board ChangesShareholder Meetings
Moody’s Shareholders Back Directors, Auditor and Executive Pay
Positive
Apr 16, 2026
At Moody’s Corporation’s 2026 Annual Meeting of Stockholders held on April 14, 2026, shareholders elected ten directors to one-year terms expiring at the 2027 annual meeting, with all nominees receiving strong support despite varying l...
Business Operations and StrategyExecutive/Board Changes
Moody’s Analytics Names Christina Kosmowski as New CEO
Positive
Apr 15, 2026
Moody’s Corporation said on April 15, 2026, that Christina Kosmowski will become Chief Executive Officer of its $3.6 billion-revenue Moody’s Analytics division in June, bringing nearly 30 years of enterprise technology experience to th...
Business Operations and StrategyFinancial Disclosures
Moody’s Reports Record 2025 Results and Growth Outlook
Positive
Feb 18, 2026
Moody’s Corporation reported that in the fourth quarter of 2025 revenue rose 13% year on year to $1.9 billion, while full-year 2025 revenue increased 9% to a record $7.7 billion, with foreign exchange providing a modest tailwind. Diluted ear...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.