Moody's (MCO) AI Stock Analysis

• Market Cap: $80.24B
• Dividend Yield: 0.73%
• Average Volume (3M): 1.37M
• Price to Earnings (P/E): 33.1
• Beta (1Y): 1.10
• 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): 3.64
• Shares Outstanding: 177,300,000
• 10 Day Avg. Volume: 1,623,534
• 30 Day Avg. Volume: 1,365,222
• PEG Ratio: 1.75
• Price to Book (P/B): 22.57
• Price to Sales (P/S): 11.85
• P/FCF Ratio: 35.53
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 11.41
• Enterprise Value/Gross Profit: 16.74
• Enterprise Value/Ebitda: 22.64
• 1Y Price Target: $555.87
• Price Target Upside: 19.96% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 17
• EPS Forecast (FY): 16.72
• Revenue Forecast (FY): $8.29B

• Rating: 71 Outperform
• Price Target: $498.00 ▲(7.47% Upside)
• Action: Reiterated Date: 02/19/26
• Date: Action: Reiterated 02/19/26

The score is driven primarily by strong financial performance (high margins and cash flow) and an upbeat earnings call with margin/EPS/FCF growth guidance and shareholder returns. This is partially offset by weak technicals (downtrend and bearish momentum) and a premium valuation with a modest dividend yield.

Positive Factors

Free Cash Flow Strength

Consistent, high free cash flow (~$2.9B in 2025) provides durable financial flexibility. It funds buybacks, a rising dividend, and strategic reinvestment (AI, product development, modest CapEx), supporting shareholder returns while enabling execution through economic cycles.

High and Improving Margins

Very high gross and net margins reflect scalable, software-like economics across ratings and analytics. Margin expansion drives strong ROE and cash conversion, sustaining durable profitability even with incremental investments and supporting long-run operating leverage.

Recurring Revenue / Product Stickiness

A subscription-heavy Analytics business (97% recurring, $3.5B ARR) and high retention concentrate revenue into predictable streams. Combined with AI-led adoption and embedded workflows, this creates durable customer stickiness and predictable ARR growth with high renewal economics.

Negative Factors

Elevated Leverage

Leverage remains elevated (~1.8x), limiting financial flexibility and increasing sensitivity to higher interest rates or credit-market stress. Elevated debt can constrain opportunistic M&A, ratchet up funding costs, and force tougher capital-allocation tradeoffs in downturns.

Divestitures Reduce Reported Growth

Recent and pending divestitures subtract from reported revenue and introduce one-time and recurring growth headwinds. This alters segment scale and reported growth metrics, complicating comparability and temporarily masking underlying organic momentum in Analytics.

Ratings Issuance Sensitivity

Ratings revenue is structurally tied to issuance cycles and M&A activity. Heavy H1 issuance weighting and market dependency create durable revenue volatility risk: weaker capital markets or delayed deals can materially compress MIS revenue despite strong underlying competitive position.

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

Fundamentals are strong: improving profitability (net margin ~32% and higher gross margin in 2025) and robust cash generation with FCF around $2.9B and good cash conversion. The main drag is balance-sheet risk—leverage remains elevated (debt-to-equity ~1.8x in 2025) despite improvement—plus some year-to-year variability.

Income Statement

Moody’s shows strong and improving profitability, with gross margin rising to ~74% in 2025 (vs. mid‑60%s in 2022–2024) and net margin reaching ~32%. Earnings expanded alongside revenue, and revenue growth accelerated meaningfully in 2025. The main offset is that margins have not been perfectly steady year-to-year (including a revenue decline in 2022), and one reported operating margin value appears inconsistent with the underlying profit figures, limiting confidence in that specific line item.

Balance Sheet

The balance sheet reflects solid value creation (very high returns on equity across the period) and a growing equity base since 2020, but leverage remains elevated. Debt-to-equity is still ~1.8x in 2025 (improved from ~3–4x earlier years, but high for comfort), which increases sensitivity to downturns or higher funding costs. Overall assets have grown steadily, but the capital structure remains debt-heavy.

Cash Flow

Cash generation is a clear strength: operating cash flow increased to ~$2.9B in 2025 and free cash flow reached ~$2.9B, with strong 2025 free-cash-flow growth. Cash conversion is healthy, with free cash flow roughly matching net income in 2025 (and close to it in prior years), supporting flexibility for reinvestment and shareholder returns. The main weakness is variability in free-cash-flow growth (notably a decline in 2022), indicating periodic swings in cash generation.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.72B	7.09B	5.92B	5.47B	6.22B
Gross Profit	5.26B	4.71B	3.85B	3.52B	4.32B
EBITDA	3.94B	3.33B	2.52B	2.31B	3.25B
Net Income	2.46B	2.06B	1.61B	1.37B	2.21B
Balance Sheet
Total Assets	15.83B	15.51B	14.62B	14.35B	14.68B
Cash, Cash Equivalents and Short-Term Investments	2.45B	2.97B	2.19B	1.86B	1.90B
Total Debt	7.35B	7.75B	7.42B	7.86B	7.97B
Total Liabilities	11.63B	11.78B	11.15B	11.66B	11.76B
Stockholders Equity	4.05B	3.56B	3.32B	2.52B	2.73B
Cash Flow
Free Cash Flow	2.58B	2.52B	1.88B	1.19B	1.87B
Operating Cash Flow	2.90B	2.84B	2.15B	1.47B	2.00B
Investing Cash Flow	2.00M	-1.06B	-247.00M	-262.00M	-2.62B
Financing Cash Flow	-3.06B	-1.45B	-1.58B	-1.21B	-122.00M

Moody's Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 463.37
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCO, the sentiment is Neutral. The current price of 463.37 is above the 20-day moving average (MA) of 457.67, below the 50-day MA of 494.13, and below the 200-day MA of 491.36, indicating a neutral trend. The MACD of -15.29 indicates Negative momentum. The RSI at 48.77 is Neutral, neither overbought nor oversold. The STOCH value of 87.62 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MCO.

Moody's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MSCI	76 Outperform	$40.32B	34.98	―	1.24%	9.02%	3.45%
FDS	72 Outperform	$7.48B	12.82	28.83%	1.49%	5.88%	12.18%
MCO	71 Outperform	$80.24B	33.11	64.55%	0.73%	8.77%	13.62%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SPGI	67 Neutral	$124.98B	28.54	13.91%	0.73%	9.04%	21.35%
MORN	63 Neutral	$6.45B	18.38	26.35%	0.84%	7.76%	15.92%

Moody's Corporate Events

Moody’s Reports Record 2025 Results and Growth Outlook

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 earnings per share for 2025 climbed 21% to $13.67 and adjusted diluted EPS advanced 20% to $14.94, and the company issued 2026 EPS guidance implying further profit growth.

Moody’s Analytics posted 9% revenue growth in both the fourth quarter and full year 2025, driven by double-digit expansion in Decision Solutions and an 11% increase in recurring revenue, which now represents 97% of the segment’s sales. Annualized recurring revenue reached $3.5 billion, up 8% from December 31, 2024, as the unit continued to shift away from transaction-based business and deepen its subscription-led, workflow-embedded offering.

Moody’s Investors Service delivered its strongest-ever fourth quarter in 2025 with revenue up 17%, supported by robust investment-grade issuance, including several large AI-related financings, and a 30% surge in public, project and infrastructure finance activity. For the full year 2025, MIS revenue also grew 9%, underpinned by record issuance exceeding $6.6 trillion, broad-based strength in corporate and structured finance, rising banking sector issuance and growing private credit activity, while overall operating expenses rose a modest 4%, reflecting continued investment and acquisition costs partly offset by lower incentive compensation.

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 appoints Lisa Sawicki to board of directors

On January 12, 2026, Moody’s Corporation announced that Lisa P. Sawicki, a veteran audit and advisory professional with more than 35 years of experience in financial services, has been elected to its Board of Directors effective March 16, 2026, bringing the board to ten members. Sawicki, who most recently served from 2021 to 2025 as Chair of the Global Board and Client Partner at PricewaterhouseCoopers and previously held multiple senior leadership roles in PwC’s financial services and assurance practices, will join Moody’s Audit and Governance & Nominating Committees, a move expected to strengthen the company’s oversight in audit, governance and regulatory matters amid a rapidly evolving global risk environment. In line with Moody’s standard compensation plan for non-employee directors, she will receive an annual cash retainer and a restricted stock unit award, and the company noted there are no family relationships, side arrangements or related-party transactions associated with her appointment, underscoring the board’s emphasis on independent governance.

The most recent analyst rating on (MCO) stock is a Buy with a $580.00 price target. To see the full list of analyst forecasts on Moody’s stock, see the MCO Stock Forecast page.

Moody’s Tightens Retirement Rules in Amended Equity Plan

On December 16, 2025, Moody’s Corporation’s board approved amendments to its 2001 Key Employees’ Stock Incentive Plan, tightening and clarifying conditions under which employees receive favorable “Retirement” treatment for equity awards, including requiring that such employees be in good standing, comply with post-termination obligations, and, where required, sign a release of claims. The changes also introduce greater flexibility in restricted stock unit vesting schedules and formally align equity treatment upon death or disability with the company’s existing practices, signaling a more structured and controlled approach to equity compensation and retirement-related benefits for key employees.

The most recent analyst rating on (MCO) stock is a Buy with a $570.00 price target. To see the full list of analyst forecasts on Moody’s stock, see the MCO Stock Forecast page.