Morningstar (MORN) AI Stock Analysis

• Market Cap: $12.39B
• Dividend Yield: 0.59%
• Average Volume (3M): 223.45K
• Price to Earnings (P/E): 34.2
• Beta (1Y): 0.91
• Revenue Growth: 9.89%
• EPS Growth: 79.71%
• Country: US
• Employees: 11,115
• Sector: Financial
• Sector Strength: 88
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 8.91
• Shares Outstanding: 42,249,190
• 10 Day Avg. Volume: 229,307
• 30 Day Avg. Volume: 223,450
• PEG Ratio: 0.43
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 9.69
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $344.50
• Price Target Upside: 17.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Morningstar's overall stock score reflects its strong financial performance and positive impact from recent corporate events, such as strategic focus on AI and product enhancements. However, the technical analysis suggests potential downward momentum, and the company's high valuation limits its attractiveness. Continued attention to cost management and debt reduction could further improve its standing.

Positive Factors

Growth Potential

The diversity of business segments and underlying data universe present an attractive opportunity for Morningstar.

Strategic Partnerships

Morningstar signed a partnership with SS&C's Black Diamond Wealth platform - the first to integrate with Direct Advisory Suite, which could present a pricing opportunity upon renewals and help drive the renewal rate.

Technological Advancement

Many clients are using AI and it should drive growth of Morningstar datasets and IP, differentiating its data by the combination of raw data and historical ESG reporting requirements.

Negative Factors

Inflation Impact

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

Macroeconomic Challenges

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

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 exhibits strong financial health with consistent revenue growth, solid profitability, and efficient cash flow management. The balance sheet is stable, though rising debt levels warrant attention. The company is well-positioned in its industry, but continued focus on cost management and debt reduction could further enhance its financial standing.

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
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
714.20M	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
1.62B	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: Positive
• Last Price: 293.19
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MORN, the sentiment is Positive. The current price of 293.19 is above the 20-day moving average (MA) of 276.00, above the 50-day MA of 290.26, and below the 200-day MA of 317.81, indicating a neutral trend. The MACD of -1.46 indicates Negative momentum. The RSI at 57.01 is Neutral, neither overbought nor oversold. The STOCH value of 91.61 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MORN.

Morningstar Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SPGI	76 Outperform	$155.38B	39.78	11.68%	0.73%	12.98%	42.72%
MORN	74 Outperform	$12.39B	34.16	25.68%	0.59%	9.89%	79.71%
FDS	74 Outperform	$16.49B	30.88	28.12%	0.96%	4.66%	11.15%
VALU	72 Outperform	$384.07M	17.86	22.87%	3.00%	-6.56%	17.95%
MSCI	70 Outperform	$43.00B	38.22	-117.99%	1.19%	11.67%	-0.89%
DNB	65 Neutral	$4.00B	―	-0.64%	2.23%	2.93%	39.49%
Sector *	64 Neutral	$12.64B	9.74	8.05%	17044.60%	12.66%	-4.62%

Morningstar Corporate Events

Morningstar Reports Strong Q1 Revenue Growth

On April 30, 2025, Morningstar, Inc. reported a strong start to the year with first-quarter revenue growth of 7.2% to $581.9 million, driven by significant contributions from PitchBook and Morningstar Credit. The company also saw increases in operating income and margins, despite market volatility and economic uncertainty. Morningstar accelerated its stock repurchases and expanded its offerings through acquisitions, while facing challenges such as increased operating expenses due to compensation costs and the sunsetting of Morningstar Office.

Spark’s Take on MORN Stock

According to Spark, TipRanks’ AI Analyst, MORN is a Outperform.

Morningstar’s overall score reflects its strong financial performance, with robust revenue and profit growth, and effective cash management. However, technical indicators suggest potential downward momentum, and the company’s valuation is on the higher side with a modest dividend yield. The positive impact of recent corporate events, particularly their focus on AI and strategic product enhancements, further bolsters the stock’s attractiveness.

To see Spark’s full report on MORN stock, click here.

Morningstar Addresses Investor Questions in New Report

Morningstar, Inc. released a report addressing investor questions received through March 31, 2025, highlighting its financial performance and strategic direction. In 2024, the company saw a significant increase in adjusted operating income, but also faced challenges such as a slowdown in organic revenue growth in its Data and Analytics segment and increased operating expenses due to higher compensation costs. The company is focusing on long-term margin expansion and aims to enhance its product offerings, including the launch of the Direct Advisory Suite in January 2025, to drive future growth.

Spark’s Take on MORN Stock

According to Spark, TipRanks’ AI Analyst, MORN is a Outperform.

Morningstar’s overall score reflects its strong financial performance, with robust revenue and profit growth, and effective cash management. However, technical indicators suggest potential downward momentum, and the company’s valuation is on the higher side with a modest dividend yield. The positive impact of recent corporate events, particularly their focus on AI and strategic product enhancements, further bolsters the stock’s attractiveness.

To see Spark’s full report on MORN stock, click here.

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.