Morningstar (MORN) AI Stock Analysis

• Market Cap: $11.49B
• Dividend Yield: 0.65%
• Average Volume (3M): 336.91K
• Price to Earnings (P/E): 29.0
• Beta (1Y): 0.84
• Revenue Growth: 8.23%
• EPS Growth: 64.35%
• Country: US
• Employees: 11,115
• Sector: Financial
• Sector Strength: 68
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 2.40
• Shares Outstanding: 42,177,740
• 10 Day Avg. Volume: 395,664
• 30 Day Avg. Volume: 336,912
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.20
• Enterprise Value/Revenue: 5.89
• Enterprise Value/Gross Profit: 9.67
• Enterprise Value/Ebitda: 18.88
• 1Y Price Target: $337.50
• Price Target Upside: 24.82% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 68 Neutral
• Price Target: $301.00 ▲(11.32%Upside)

Morningstar's overall stock score of 68 is driven by strong financial performance and positive corporate events, including strategic AI initiatives and dividend distribution. However, technical analysis points to bearish momentum, and valuation suggests potential overpricing concerns.

Positive Factors

Market Expansion

Management's PitchBook TAM assumptions have increased sizably from $6.5B in 2023 to $11.1B in 2025 due to expanding data coverage and use cases across client types and private market growth.

Strategic Growth

Analyst raises the target price following Morningstar's annual shareholder meeting, appreciating its long-term strategy.

Negative Factors

Challenging Macro Environment

Management noted facing a more challenging macro in the US, particularly in the corporate client segment.

Platform Deceleration

Management re-discussed the drivers of the deceleration in MORN Direct Platform, which has been a focus in the last several Q&A responses.

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 makes money through a diversified revenue model primarily driven by subscriptions, licenses, and asset-based fees. Key revenue streams include the sale of investment research, data services, and software products to financial professionals and institutions. The company offers subscription-based platforms like Morningstar Direct, Morningstar Advisor Workstation, and Morningstar Office, which provide valuable analytics and portfolio management tools. Additionally, Morningstar generates revenue from its investment management services, where it earns fees based on assets under management. Significant partnerships with financial institutions and mutual fund companies also contribute to its earnings, as these entities rely on Morningstar's ratings and research to enhance their investment offerings.

Morningstar Financial Statement Overview

Summary

Morningstar exhibits strong financial health with consistent revenue growth, solid profitability, and efficient cash flow management. Balance sheet stability is present, but rising debt levels warrant attention.

Income Statement

Morningstar demonstrated strong revenue growth with a revenue growth rate of 16.63% from 2023 to TTM, and 21.52% from 2022 to 2023. The company also maintained solid profitability, with a gross profit margin of 58.58% for TTM, and a net profit margin of 16.62%. However, there is a slight decrease in gross profit margin compared to the previous year, indicating a marginal increase in cost structure.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.62, indicating a reasonable level of leverage. Return on Equity (ROE) improved significantly to 23.87% in TTM, showcasing strong returns for shareholders. The equity ratio stands at 44.89%, suggesting a solid equity base. However, the total debt has increased, which could pose potential risk if not managed properly.

Cash Flow

Operating cash flow remains robust, with a free cash flow to net income ratio of 1.17 in TTM, indicating efficient cash generation relative to net income. The free cash flow growth rate is 127.14% from 2023 to TTM, showing substantial improvement in cash reserves. The operating cash flow to net income ratio is 1.53, further supporting strong cash flow generation. However, capital expenditures are still significant, which could impact free cash flow if not optimized.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.35B	2.28B	2.04B	1.87B	1.70B	1.39B
Gross Profit	1.43B	1.38B	1.20B	1.09B	1.00B	833.10M
EBITDA	732.70M	714.20M	419.70M	323.70M	417.00M	433.90M
Net Income	404.10M	369.90M	141.10M	70.50M	193.30M	223.60M
Balance Sheet
Total Assets	3.63B	3.55B	3.40B	3.47B	2.86B	2.70B
Cash, Cash Equivalents and Short-Term Investments	503.50M	551.00M	389.00M	414.60M	546.10M	464.20M
Total Debt	1.03B	904.00M	1.16B	1.32B	531.50M	626.70M
Total Liabilities	2.02B	1.93B	2.08B	2.27B	1.45B	1.42B
Stockholders Equity	1.61B	1.62B	1.33B	1.21B	1.42B	1.27B
Cash Flow
Free Cash Flow	389.80M	448.90M	197.30M	168.30M	348.10M	307.60M
Operating Cash Flow	535.30M	591.60M	316.40M	297.80M	449.90M	384.30M
Investing Cash Flow	-56.40M	-21.30M	-81.90M	-799.30M	-167.70M	-123.80M
Financing Cash Flow	-391.90M	-384.40M	-278.40M	415.10M	-211.80M	-182.20M

Morningstar Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 270.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• 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 270.4 is below the 20-day moving average (MA) of 285.55, below the 50-day MA of 298.19, and below the 200-day MA of 313.01, indicating a bearish trend. The MACD of -7.03 indicates Positive momentum. The RSI at 29.22 is Positive, neither overbought nor oversold. The STOCH value of 22.20 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
SPGI	81 Outperform	$166.59B	41.94	11.76%	0.69%	10.72%	23.30%
FDS	73 Outperform	$14.79B	28.25	26.35%	1.08%	5.07%	4.19%
VALU	72 Outperform	$351.60M	17.00	21.72%	3.35%	-6.42%	8.90%
MSCI	70 Outperform	$43.12B	36.93	-117.99%	1.22%	10.48%	0.98%
MORN	68 Neutral	$11.49B	28.99	26.51%	0.65%	8.23%	64.35%
Sector *	67 Neutral	$17.01B	11.59	9.50%	3.95%	10.65%	1.31%
DNB	63 Neutral	$4.07B	―	-0.64%	2.20%	2.52%	42.27%

Morningstar Corporate Events

Morningstar Reports Q2 2025 Financial Results

On July 30, 2025, Morningstar, Inc. reported its financial results for the second quarter of 2025, highlighting a 5.8% increase in revenue to $605.1 million compared to the previous year. The company saw significant contributions from its PitchBook, Morningstar Direct Platform, and Morningstar Credit segments. Despite a decrease in cash flow, Morningstar achieved a 15.3% rise in operating income and a 30.6% increase in diluted net income per share. The report also noted challenges such as increased compensation costs and marketing expenses, as well as risks related to cybersecurity, economic conditions, and regulatory changes.

The most recent analyst rating on (MORN) stock is a Buy with a $281.00 price target. To see the full list of analyst forecasts on Morningstar stock, see the MORN Stock Forecast page.

Morningstar Expands Private Credit Capabilities Amid Growth Slowdown

Morningstar‘s recent report highlights the company’s strategic focus on expanding its private credit capabilities, which are projected to significantly contribute to its revenue growth across various segments. The report also addresses a slowdown in organic growth for the Morningstar Direct Platform, attributed to factors such as slower license growth, loss of a major client, and strategic shifts in product offerings, impacting the company’s operational performance and market positioning.

The most recent analyst rating on (MORN) stock is a Buy with a $281.00 price target. To see the full list of analyst forecasts on Morningstar stock, see the MORN Stock Forecast page.

Morningstar Declares Quarterly Dividend for Shareholders

On June 20, 2025, Morningstar, Inc. announced that its Board of Directors approved a quarterly cash dividend of 45.5 cents per share, which will be payable on July 31, 2025, to shareholders of record as of July 11, 2025. This decision reflects the company’s ongoing commitment to returning value to its shareholders and maintaining its financial stability, despite the various risks and uncertainties outlined in their forward-looking statements.

The most recent analyst rating on (MORN) stock is a Buy with a $281.00 price target. To see the full list of analyst forecasts on Morningstar stock, see the MORN Stock Forecast page.

Morningstar Implements New Executive Severance Policy

On May 9, 2025, Morningstar, Inc. implemented a new Executive Severance Policy, offering severance benefits to its executive team, including the CEO, CFO, and CRO, in cases of termination without cause, death, or disability. The policy also outlines enhanced benefits in the event of a change in control. Additionally, Morningstar held its Annual Shareholders’ Meeting on the same day, where directors were elected, executive compensation was approved, and KPMG LLP was ratified as the independent registered public accounting firm for 2025.

The most recent analyst rating on (MORN) stock is a Buy with a $281.00 price target. To see the full list of analyst forecasts on Morningstar stock, see the MORN Stock Forecast page.

Morningstar Highlights AI Focus in Investor Q&A

Morningstar, Inc. released its Investor Q&A for questions received through March 31, 2025, highlighting its strategic focus on strengthening competitive positions and leveraging artificial intelligence to enhance product offerings. The company is addressing trends in the investment landscape by expanding data sets and creating tools to simplify customer workflows. Additionally, Morningstar is investing in data and analytics to drive operational scale and meet investor needs, while also managing increased corporate expenses due to higher compensation and marketing costs. The company’s strategy aims to maintain growth and deliver long-term value to shareholders amid changing economic conditions and regulatory landscapes.