Morningstar (MORN) AI Stock Analysis

• Market Cap: $7.09B
• Dividend Yield: 0.84%
• Average Volume (3M): 650.62K
• Price to Earnings (P/E): 24.3
• Beta (1Y): 0.67
• Revenue Growth: 7.76%
• EPS Growth: 15.92%
• Country: US
• Employees: 11,115
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 2.71
• Shares Outstanding: 39,583,760
• 10 Day Avg. Volume: 453,586
• 30 Day Avg. Volume: 650,618
• PEG Ratio: 7.25
• Price to Book (P/B): 7.45
• Price to Sales (P/S): 3.72
• P/FCF Ratio: 20.57
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 3.39
• Enterprise Value/Gross Profit: 5.56
• Enterprise Value/Ebitda: 11.38
• 1Y Price Target: $236.50
• Price Target Upside: 32.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 11.13
• Revenue Forecast (FY): $2.62B

• Rating: 64 Neutral
• Price Target: $194.00 ▲(8.34% Upside)
• Action: Reiterated Date: 03/14/26
• Date: Action: Reiterated 03/14/26

The score is driven primarily by solid financial performance (profitability rebound and strong cash generation), partially offset by higher leverage and some margin compression. Technicals remain a key constraint with the stock below major longer-term moving averages, while valuation appears reasonable but not cheap; corporate updates are supportive due to strong results and ongoing capital returns.

Positive Factors

Recurring subscription/licensing model

Morningstar’s core revenue comes from multi-year subscriptions, data licensing and index fees, creating high recurring revenue and predictable renewals. This durable mix supports stable cash flow, high customer retention, and scalable margins as product penetration and seat-based pricing expand over time.

Strong cash generation and free cash flow

Consistent operating cash flow near $590M and FCF ~$440–450M underpin sustained internal funding for R&D, buybacks and dividends. High FCF conversion (~75% of net income) signals earnings quality and long-term capacity to invest and return capital without overreliance on external financing.

Revenue growth and improved adjusted margins

Steady revenue growth plus a material rebound in adjusted operating margin to ~23.8% reflects scalable product economics and improved operating leverage, driven by PitchBook, Morningstar Credit and Direct. These structural improvements support sustainable profitability as the firm expands higher‑value offerings.

Negative Factors

Rising leverage

A sharp increase in leverage reduces financial flexibility and raises interest and refinancing risk if growth weakens. Higher debt can constrain M&A optionality and capital allocation, making the company more sensitive to slower revenue or margin shocks over a multi‑quarter horizon.

Margin compression in 2025

Despite overall profitability recovery, margin compression in 2025 suggests higher compensation and technology or restructuring costs. If such cost pressures persist or investments don’t yield commensurate revenue lift, long‑run margin sustainability could be impaired, pressuring cash returns and reinvestment capacity.

Cash timing / working capital volatility

OCF consistently below net income implies working‑capital or noncash timing effects that can create cash volatility. In stressed markets this could magnify liquidity pressure despite positive FCF trends, complicating short‑term funding for operations, buybacks, or unexpected expenditures.

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 primarily makes money by selling and licensing investment information, research, and technology to financial professionals and institutions, and by earning fees tied to managed investment products and services. Key revenue streams include: (1) Subscription revenue from investment platforms and software: recurring fees paid by advisors, wealth managers, asset managers, and other financial institutions for access to Morningstar’s research, analyst reports, ratings, portfolio analytics, risk tools, screening, and workflow capabilities. These offerings are typically sold as annual or multi-year subscriptions and seat-based licenses. (2) Data and content licensing: fees from licensing Morningstar’s investment data, research content, and/or analytics through data feeds and APIs for integration into clients’ internal systems, client-facing portals, or third-party platforms; these contracts are often recurring and priced based on usage, scope, or distribution rights. (3) Index and benchmark-related revenue: licensing fees for use of Morningstar indexes by financial product sponsors and other institutions; this can include licensing for index-based products and for data redistribution tied to index usage. (4) Asset-based and service fees through investment-related businesses: Morningstar also earns revenue from managed investment products and services (e.g., advisory/managed portfolio, retirement/plan solutions, or investment management-related activities) where fees may be based on assets under management/administration, contract terms, and service scope. (5) Transactional/other revenue: to a lesser extent, the company may earn revenue from one-time projects, implementation, consulting, training, events, or advertising associated with certain media or investor-facing properties when applicable. Morningstar’s earnings are influenced by the size and retention of its subscription customer base, renewals and contract expansions, market levels and asset values (which can affect asset-based fees), and demand from financial institutions for data, analytics, and index licensing.

Morningstar Financial Statement Overview

Summary

Strong revenue growth and a meaningful profitability rebound since 2022–2023, supported by consistently solid operating cash flow and healthy free cash flow. Offsetting this, 2025 showed margin compression versus 2024 and a sharp increase in leverage (debt-to-equity rising to ~1.15 as equity fell), which raises financial risk.

Income Statement

Revenue has grown steadily over 2020–2025, with 2025 showing an unusually strong jump versus prior years. Profitability has improved meaningfully since 2022–2023, with net profit margin rising to ~15% in 2025 from a low-single-digit level in 2022. The main drawback is margin compression in 2025 versus 2024 (gross, operating, and EBITDA margins all stepped down), suggesting higher costs or investment spend even as earnings remain solid.

Balance Sheet

Returns on equity are strong and improving (rising to ~31% in 2025), signaling efficient profit generation. However, leverage has increased sharply: debt-to-equity moved from ~0.56 in 2024 to ~1.15 in 2025 as total debt rose materially while equity fell. That higher leverage reduces balance-sheet flexibility and increases risk if operating conditions soften.

Cash Flow

Cash generation is consistently solid, with operating cash flow near ~$590M in both 2024 and 2025 and free cash flow around ~$440M–$450M. Free cash flow growth accelerated in 2025, and free cash flow is a healthy ~75% of net income, indicating good earnings quality. A watch item is that operating cash flow relative to net income is below 1.0 across the period (though improved versus 2022–2023), implying working-capital or non-cash timing effects that can create volatility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.45B	2.28B	2.04B	1.87B	1.70B
Gross Profit	1.49B	1.38B	1.20B	1.09B	1.00B
EBITDA	728.90M	731.60M	418.10M	325.60M	409.90M
Net Income	374.20M	369.90M	141.10M	70.50M	193.30M
Balance Sheet
Total Assets	3.59B	3.55B	3.40B	3.47B	2.86B
Cash, Cash Equivalents and Short-Term Investments	528.70M	551.00M	389.00M	414.60M	546.10M
Total Debt	1.41B	904.00M	1.16B	1.32B	531.50M
Total Liabilities	2.37B	1.93B	2.08B	2.27B	1.45B
Stockholders Equity	1.22B	1.62B	1.33B	1.21B	1.42B
Cash Flow
Free Cash Flow	442.60M	448.90M	197.30M	168.30M	348.10M
Operating Cash Flow	589.70M	591.60M	316.40M	297.80M	449.90M
Investing Cash Flow	-139.30M	-21.30M	-81.90M	-799.30M	-167.70M
Financing Cash Flow	-514.70M	-384.40M	-278.40M	415.10M	-211.80M

Morningstar Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 179.07
• 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 179.07 is below the 20-day moving average (MA) of 181.10, below the 50-day MA of 186.60, and below the 200-day MA of 232.38, indicating a bearish trend. The MACD of 0.35 indicates Negative momentum. The RSI at 46.28 is Neutral, neither overbought nor oversold. The STOCH value of 27.56 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
MSCI	76 Outperform	$40.60B	36.82	-74.96%	1.24%	9.02%	3.45%
FDS	75 Outperform	$7.76B	16.99	28.00%	1.49%	5.88%	12.18%
VALU	73 Outperform	$334.19M	14.89	21.16%	3.31%	-3.75%	-4.34%
MCO	71 Outperform	$77.15B	37.25	62.81%	0.73%	8.77%	13.62%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SPGI	67 Neutral	$126.82B	35.63	13.62%	0.73%	9.04%	21.35%
MORN	64 Neutral	$7.09B	24.33	25.12%	0.84%	7.76%	15.92%

Morningstar Corporate Events

Morningstar Maintains Quarterly Dividend, Signals Ongoing Stability

On March 13, 2026, Morningstar, Inc.’s board of directors declared a quarterly cash dividend of 50 cents per share, matching the payout made in January. The dividend will be paid on April 30, 2026 to shareholders of record as of April 3, 2026, underscoring the company’s continuing commitment to returning capital to investors through regular distributions.

The decision to maintain the dividend level signals confidence in Morningstar’s cash generation and balance-sheet flexibility, despite the broader operational and regulatory risks the firm acknowledges across its global data, research, and investment management businesses. For shareholders, the announcement reinforces expectations of ongoing income from the stock while the company continues to navigate market volatility, competitive pressures, and evolving technological and compliance challenges.

The most recent analyst rating on (MORN) stock is a Buy with a $203.00 price target. To see the full list of analyst forecasts on Morningstar stock, see the MORN Stock Forecast page.

Morningstar Posts Strong Q4 2025 Results and Margins

Morningstar, Inc. reported on Feb. 12, 2026 that fourth-quarter 2025 revenue rose 8.5% to $641.1 million and full-year revenue grew 7.5% to $2.4 billion, with organic growth driven mainly by Morningstar Credit, PitchBook and the Morningstar Direct Platform. While reported Q4 operating income declined 5.1% due to a lower gain on the prior sale of US TAMP assets, adjusted operating income jumped 26.1%, and adjusted diluted EPS climbed 26.6%, supported by higher margins and strong cash generation.

For 2025, operating income increased 8.6% and adjusted operating income rose 18.0%, with adjusted operating margin improving to 23.8% despite higher compensation and technology costs tied to targeted reorganizations and severance. Segment results highlighted particularly robust growth and margin expansion in Morningstar Credit, solid performance at Morningstar Direct and PitchBook amid flat license counts, and weaker reported revenue at Morningstar Wealth, while substantial share repurchases underscored an aggressive capital return strategy even as the effective tax rate moved higher.

The most recent analyst rating on (MORN) stock is a Buy with a $251.00 price target. To see the full list of analyst forecasts on Morningstar stock, see the MORN Stock Forecast page.

Morningstar Appoints Anne Bramman to Board of Directors

On January 5, 2026, Morningstar, Inc. announced that seasoned finance executive Anne Bramman has been elected to its board of directors, adding significant financial and strategic expertise to the company’s leadership. Bramman, currently a board director and audit committee chair at McCormick & Company and a senior advisor at Boston Consulting Group, brings more than three decades of experience, including prior roles as CFO at Nordstrom, Avery Dennison, Carnival Cruise Line, L Brands, and most recently as CFO and chief growth officer at consumer analytics platform Circana from 2023 to 2024. Morningstar’s executive chairman Joe Mansueto highlighted her track record in driving financial excellence, business transformation, and strategic M&A, suggesting her appointment is poised to strengthen Morningstar’s governance and support its long-term growth ambitions, with potential benefits for shareholders and other stakeholders as the firm continues scaling its global investment insights and asset management operations.

The most recent analyst rating on (MORN) stock is a Buy with a $241.00 price target. To see the full list of analyst forecasts on Morningstar stock, see the MORN Stock Forecast page.

Morningstar issues investor Q&A highlighting PitchBook growth

Morningstar has published an investor Q&A dated December 23, 2025, compiling written responses to shareholder and prospective investor questions received through December 5, 2025, as part of its policy on transparent public disclosure and investor communications. In the release, the company details that PitchBook’s strong growth over the past five years has been driven by a mix of new customer acquisition, robust net renewal rates, price increases, and especially expansion within large asset‑under‑management accounts, with an increasing emphasis on deepening relationships with existing large clients and targeting remaining large AUM firms as well as small- and mid-sized, corporate, and service-provider segments to sustain growth as markets normalize.

The most recent analyst rating on (MORN) stock is a Buy with a $245.00 price target. To see the full list of analyst forecasts on Morningstar stock, see the MORN Stock Forecast page.