Moody's (MCO) AI Stock Analysis

• Market Cap: $85.18B
• Dividend Yield: 0.77%
• Average Volume (3M): 713.67K
• Price to Earnings (P/E): 40.4
• Beta (1Y): 1.18
• 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: 958,167
• 30 Day Avg. Volume: 713,673
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 13.07
• Enterprise Value/Gross Profit: 19.66
• Enterprise Value/Ebitda: 27.77
• 1Y Price Target: $549.00
• Price Target Upside: 15.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 71 Outperform
• Price Target: $533.00 ▲(11.80% Upside)

Moody's overall stock score is driven by strong financial performance and a positive earnings call, highlighting strategic growth initiatives and robust revenue expansion. However, technical analysis indicates bearish momentum, and the high valuation suggests limited upside potential. The company's strategic focus on AI and private credit positions it well for future growth, despite current market challenges.

Positive Factors

Revenue Growth

Consistent revenue growth reflects Moody's ability to navigate challenging market conditions, indicating strong demand for its services and products.

Private Credit Expansion

The expansion in private credit positions Moody's to capitalize on growing market trends, enhancing its competitive advantage and revenue streams.

Strategic Partnerships

The partnership with Microsoft enhances Moody's data integration capabilities, broadening its market reach and strengthening its service offerings.

Negative Factors

Reliance on Debt Financing

High reliance on debt financing may limit Moody's financial flexibility and increase vulnerability to adverse market conditions, impacting long-term stability.

Corporate Finance Revenue Decline

Declining revenue in Corporate Finance indicates challenges in key segments, potentially affecting Moody's growth and profitability if trends persist.

Structured Finance Issuance Drop

A significant drop in Structured Finance issuance highlights market volatility risks, which could impact Moody's revenue from this segment if conditions remain unstable.

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 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	4.86B	4.71B	3.85B	3.52B	4.32B	3.68B
EBITDA	3.44B	3.33B	2.52B	2.31B	3.25B	2.68B
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	2.37B	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	-1.10B
Financing Cash Flow	-2.50B	-1.45B	-1.58B	-1.21B	-122.00M	-328.00M

Moody's Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 476.74
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 476.74 is below the 20-day moving average (MA) of 496.85, below the 50-day MA of 505.42, and below the 200-day MA of 481.68, indicating a bearish trend. The MACD of -8.45 indicates Positive momentum. The RSI at 36.35 is Neutral, neither overbought nor oversold. The STOCH value of 11.76 is Positive, 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
MCO	71 Outperform	$85.18B	40.35	55.18%	0.77%	11.47%	16.14%
FDS	71 Outperform	10.95B	18.25	27.31%	1.48%	5.39%	11.56%
MSCI	71 Outperform	43.74B	37.41	-133.00%	1.24%	10.48%	0.98%
SPGI	69 Neutral	148.74B	37.27	11.98%	0.78%	10.72%	23.30%
MORN	66 Neutral	9.91B	24.65	25.03%	0.75%	8.23%	64.35%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

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.

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.