Morningstar (MORN) AI Stock Analysis

• Market Cap: $11.50B
• Dividend Yield: 0.62%
• Average Volume (3M): 221.40K
• Price to Earnings (P/E): 31.3
• Beta (1Y): 0.97
• Revenue Growth: 11.60%
• EPS Growth: 161.17%
• Country: US
• Employees: 11,085
• Sector: Financial
• Sector Strength: 80
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 8.58
• Shares Outstanding: 42,773,087
• 10 Day Avg. Volume: 211,639
• 30 Day Avg. Volume: 221,395
• PEG Ratio: 0.19
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.61
• Price to Cash Flow (P/CF): 20.80
• P/FCF Ratio: 20.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $370.00
• Price Target Upside: 37.67% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Morningstar has demonstrated strong financial performance and positive corporate events, including significant revenue growth and a dividend increase. However, the stock faces technical challenges with a bearish trend and high valuation, which temper the overall score.

Positive Factors

Financial Performance

The board of directors raised its quarterly dividend per share by 12.3%, signaling management's confidence in the company's continued strong growth.

Growth Potential

Management sees a continued runway for profitable growth and noted it does not require significant acquisitions to grow.

Partnerships and Collaborations

Morningstar signed a partnership with SS&C's Black Diamond Wealth platform - the first to integrate with Direct Advisory Suite.

Negative Factors

Market Conditions

Increased inflation and potentially long-term rates could dampen market activity, posing a headwind for PitchBook and Morningstar Credit.

Morningstar Business Overview & Revenue Model

Company Description

Morningstar, Inc. provides independent investment research services in North America, Europe, Australia, and Asia. The company offers web-based tools; investment data, fundamental equity and manager research, private capital markets research, credit and fund rating, and index, as well as environmental, social, and governance (ESG) rating services; and investment offerings, including managed investment products, publicly listed and private companies, fixed income securities, and real-time global market data for financial advisors, asset managers, retirement plan providers and sponsors, and individual and institutional investors. It also provides Morningstar Data, an investment data spanning various databases, including equity fundamentals, managed investments, ESG factors, and market data; Morningstar Direct, an investment-analysis platform; Morningstar Managed Portfolios, an advisor service consisting of model portfolio that offers services for independent financial advisors, as well as offers asset allocation services for asset managers, broker/dealers, and insurance providers; Morningstar Advisor Workstation, a web-based research, financial planning, and proposal generation platform; and Morningstar.com, a website for individual investors. In addition, the company offers Morningstar Enterprise Components; Morningstar Credit Ratings that provides issuance and surveillance services for structured finance products and instruments; corporate credit estimates and operational risk assessment rankings; Morningstar Indexes for creating investment products; Morningstar workplace solutions, such as retirement accounts, fiduciary services, allocation funds, and custom models; and PitchBook Platform, research and analysis workstation for investment and research professionals. Further, its PitchBook provides a mobile application, excel plug-in, data feeds, and data solutions. The company was incorporated in 1984 and is headquartered in Chicago, Illinois.

How the Company Makes Money

Morningstar generates revenue through various streams. The company's primary revenue sources include the sale of investment research and data products to financial advisors, asset managers, and institutional investors. It also earns money from subscription fees for access to its research platforms and analytical tools. Additionally, Morningstar makes money through its investment management services, which include managing assets directly for clients and licensing its investment indexes. Significant partnerships with financial institutions and technology platforms enhance its distribution channels, contributing to its earnings. The company's diverse portfolio of services and global presence enable it to maintain a steady revenue stream.

Morningstar Financial Statement Overview

Summary

Morningstar demonstrates solid financial health with impressive revenue and profit growth, efficient cash flow management, and strong equity standing. Caution is advised regarding the 2024 liabilities data anomaly.

Income Statement

Morningstar has shown a robust revenue growth rate of 11.6% from 2023 to 2024 and a consistent increase over the past years, reflecting strong market performance. The gross profit margin has remained healthy, and the net profit margin improved significantly from 7% in 2023 to 16.3% in 2024. The EBIT and EBITDA margins have also improved, indicating enhanced operational efficiency.

Balance Sheet

The company displays a strong equity position with a substantial equity ratio. However, the negative total liabilities in 2024 suggest a possible data anomaly or reclassification. The return on equity improved significantly from 10.6% in 2023 to 145.9% in 2024, driven by increased net income, although past leverage levels were higher.

Cash Flow

Morningstar's operating cash flow has increased appreciably, and the free cash flow growth rate from 2023 to 2024 is notable at 127.5%. The operating cash flow to net income ratio indicates strong cash conversion, and the free cash flow to net income ratio is robust, reflecting effective cash management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.28B	2.04B	1.87B	1.70B	1.39B
	Gross Profit
1.38B	1.20B	1.09B	1.00B	833.10M
	EBIT
484.80M	230.60M	167.80M	257.00M	215.20M
	EBITDA
731.60M	419.70M	323.70M	417.00M	433.90M
	Net Income Common Stockholders
369.90M	141.10M	70.50M	193.30M	223.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
551.00M	389.00M	414.60M	546.10M	464.20M
	Total Assets
3.55B	3.40B	3.47B	2.86B	2.70B
	Total Debt
904.00M	1.16B	1.32B	531.50M	626.70M
	Net Debt
401.30M	822.30M	947.00M	47.70M	204.20M
	Total Liabilities
1.93B	2.08B	2.27B	1.45B	1.42B
	Stockholders Equity
253.60M	1.33B	1.21B	1.42B	1.27B
Cash Flow		Free Cash Flow
448.90M	197.30M	168.30M	348.10M	307.60M
	Operating Cash Flow
591.60M	316.40M	297.80M	449.90M	384.30M
	Investing Cash Flow
-21.30M	-81.90M	-799.30M	-167.70M	-123.80M
	Financing Cash Flow
-384.40M	-278.40M	415.10M	-211.80M	-182.20M

Morningstar Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 268.76
• 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 MORN, the sentiment is Negative. The current price of 268.76 is below the 20-day moving average (MA) of 292.95, below the 50-day MA of 309.32, and below the 200-day MA of 319.72, indicating a bearish trend. The MACD of -2.88 indicates Negative momentum. The RSI at 49.17 is Neutral, neither overbought nor oversold. The STOCH value of 49.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MORN.

Morningstar Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FDS	74 Outperform	$15.83B	29.57	28.12%	1.00%	4.66%	11.15%
SPGI	74 Outperform	$141.70B	36.56	11.44%	0.82%	13.68%	49.90%
MSCI	73 Outperform	$39.38B	36.13	-117.99%	1.30%	12.94%	-2.54%
MORN	70 Outperform	$11.50B	31.32	25.11%	0.62%	11.60%	161.17%
VALU	68 Neutral	$346.80M	16.13	22.87%	3.26%	-6.56%	17.95%
Sector *	63 Neutral	$12.86B	9.19	9.16%	4.78%	16.31%	-8.97%
DNB	62 Neutral	$3.90B	―	-0.85%	2.29%	2.93%	39.49%

Morningstar Corporate Events

Morningstar Reports Strong Financial Growth in 2024

On February 26, 2025, Morningstar, Inc. reported significant financial growth for the year 2024, with double-digit increases in revenue and cash flow. The company achieved a 9.7% increase in fourth-quarter revenue and a 110.2% rise in full-year operating income, driven by strong performances from Morningstar Credit and PitchBook. The sale of US TAMP assets contributed to a notable gain in operating income. Morningstar’s strategic focus on AI and product enhancements, such as the Direct Advisory Suite, played a crucial role in its financial success, positioning the company strongly within the investment insights industry.

Morningstar Appoints Michael Holt as New CFO

Morningstar, Inc. has addressed investor inquiries, with responses provided in a recent report. The company highlighted its selection of Michael Holt as CFO after a thorough process, citing his extensive experience and strategic contributions. The report also detailed the potential impacts of recent U.S. federal elections on Morningstar’s various business segments, including PitchBook, Credit, and Sustainalytics, noting the possible effects on capital markets and ESG focus.