Morningstar (MORN) AI Stock Analysis

• Market Cap: $12.81B
• Dividend Yield: 0.54%
• Average Volume (3M): 136.66K
• Price to Earnings (P/E): 34.8
• Beta (1Y): 1.03
• Revenue Growth: 11.60%
• EPS Growth: 161.17%
• Country: US
• Employees: 11,334
• Sector: Financial
• Sector Strength: 93
• Industry: Capital Markets
• EPS (TTM): 8.58
• Shares Outstanding: 42,839,680
• 10 Day Avg. Volume: 195,475
• 30 Day Avg. Volume: 136,659
• PEG Ratio: 0.22
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.78
• Price to Cash Flow (P/CF): 21.40
• P/FCF Ratio: 21.40
• 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: 22.49% 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

Dividends

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

Leadership

The newly appointed CFO, Michael Holt, has a strong track record in centralizing and scaling Research and Investment capabilities, driving M&A strategy, and reframing the Wealth space.

Negative Factors

Inflation

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. is a global financial services firm headquartered in Chicago, Illinois. It specializes in investment research and investment management services. The company offers a wide range of products and services, including data and research on stocks, mutual funds, exchange-traded funds (ETFs), and other investment vehicles. Morningstar is widely recognized for its investment research and ratings, which help individual and institutional investors make informed decisions.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.82B	2.28B	2.04B	1.87B	1.70B	1.39B
	Gross Profit
1.06B	1.38B	1.20B	1.09B	1.00B	833.10M
	EBIT
252.90M	484.80M	230.60M	167.80M	257.00M	215.20M
	EBITDA
416.60M	731.60M	419.70M	323.70M	417.00M	433.90M
	Net Income Common Stockholders
181.70M	369.90M	141.10M	70.50M	193.30M	223.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
502.70M	551.00M	389.00M	414.60M	546.10M	464.20M
	Total Assets
3.55B	3.55B	3.40B	3.47B	2.86B	2.70B
	Total Debt
904.00M	904.00M	1.16B	1.32B	531.50M	626.70M
	Net Debt
401.30M	401.30M	822.30M	947.00M	47.70M	204.20M
	Total Liabilities
1.93B	1.93B	2.08B	2.27B	1.45B	1.42B
	Stockholders Equity
1.62B	253.60M	1.33B	1.21B	1.42B	1.27B
Cash Flow		Free Cash Flow
230.60M	448.90M	197.30M	168.30M	348.10M	307.60M
	Operating Cash Flow
350.70M	591.60M	316.40M	297.80M	449.90M	384.30M
	Investing Cash Flow
-823.50M	-21.30M	-81.90M	-799.30M	-167.70M	-123.80M
	Financing Cash Flow
492.40M	-384.40M	-278.40M	415.10M	-211.80M	-182.20M

Morningstar Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 302.06
• 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 MORN, the sentiment is Negative. The current price of 302.06 is below the 20-day moving average (MA) of 320.20, below the 50-day MA of 326.23, and below the 200-day MA of 319.96, indicating a bearish trend. The MACD of -6.25 indicates Positive momentum. The RSI at 30.38 is Neutral, neither overbought nor oversold. The STOCH value of 8.33 is Positive, 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
SPGI	78 Outperform	$159.07B	41.85	11.44%	0.71%	13.68%	49.90%
ICE	77 Outperform	$97.59B	35.52	10.32%	1.06%	15.32%	14.02%
NDAQ	75 Outperform	$45.30B	40.84	10.15%	1.19%	21.96%	-8.37%
FDS	73 Outperform	$16.91B	31.86	27.04%	0.94%	5.02%	12.58%
MORN	70 Outperform	$12.81B	34.85	25.11%	0.54%	11.60%	161.17%
MSCI	70 Outperform	$44.08B	40.41	-117.99%	1.16%	12.94%	-2.54%
Sector *	64 Neutral	$14.34B	10.61	9.28%	4.07%	18.04%	-9.54%

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.

Morningstar Announces CFO Transition and Dividend Increase

Morningstar, Inc. announced a CFO transition with Michael Holt taking over from Jason Dubinsky effective January 1, 2025. The company expects continuity in strategy, focusing on increasing operating income and free cash flow to enhance shareholder value. Morningstar is also focusing on margin expansion, particularly in its PitchBook and Morningstar Retirement segments, by leveraging operating efficiencies and growing assets under management. Additionally, Morningstar announced a 12.3% increase in its quarterly dividend, reflecting its improved leverage position and commitment to capital allocation priorities.

Morningstar Increases Quarterly Dividend by 12.3%

Morningstar, Inc. has announced a 12.3% increase in its quarterly dividend, raising it to 45.5 cents per share, payable on January 31, 2025. This move reflects Morningstar’s robust financial health, with expectations to continue paying dividends in 2025, a significant allure for investors seeking reliable income streams. The company remains a key player in investment research and management services globally.