Morningstar (MORN) AI Stock Analysis

• Market Cap: $7.22B
• Dividend Yield: 0.84%
• Average Volume (3M): 626.14K
• Price to Earnings (P/E): 20.6
• Beta (1Y): 0.69
• 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: 648,931
• 30 Day Avg. Volume: 626,144
• 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: 3.45
• Enterprise Value/Gross Profit: 5.65
• Enterprise Value/Ebitda: 11.57
• 1Y Price Target: $236.50
• Price Target Upside: 29.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 10.83
• Revenue Forecast (FY): $2.61B

• Rating: 63 Neutral
• Price Target: $194.00 ▲(6.41% Upside)
• Action: Downgraded Date: 02/14/26
• Date: Action: Downgraded 02/14/26

The score is supported by solid financial performance (growth, profitability rebound, and strong cash generation) and positive recent corporate developments (results, buybacks, and dividend increase). This is materially offset by very weak technicals—price far below major moving averages with negative momentum—while valuation is only moderately supportive.

Positive Factors

Diversified recurring revenue

Morningstar’s growth is driven by multiple subscription and licensing businesses (PitchBook, Morningstar Credit, Direct), reducing single-market exposure. This diversified recurring-revenue mix supports stable cash flows and customer retention, making top-line performance more resilient across cycles.

Strong cash generation

Consistent operating cash flow and high free-cash-flow conversion provide durable internal funding for investment, dividends and buybacks. Reliable FCF (~75% of net income) underpins capital allocation flexibility and reduces dependence on external financing over the medium term.

Improving profitability & returns

Adjusted margins and earnings quality rebounded materially, reflecting operating leverage and disciplined cost management. Higher adjusted operating margin and EPS gains, alongside improving ROE, indicate stronger unit economics and the ability to convert revenue growth into sustainable shareholder returns.

Negative Factors

Rising leverage

A sharp increase in leverage reduces financial flexibility and raises vulnerability to interest-rate or demand shocks. Higher debt levels constrain free-cash-flow allocation, elevate refinancing and covenant risk, and can limit the company’s ability to invest or pursue M&A without increasing financial strain.

Margin compression in 2025

Despite multi-year profitability gains, 2025 saw step-downs in key margins, reflecting higher compensation and tech investment. Sustained margin pressure would reduce cash available for returns and reinvestment, potentially offsetting revenue growth benefits if cost trends continue.

OCF conversion & timing volatility

OCF consistently trailing net income signals working-capital timing or non-cash items that can swing reported cash generation. Such variability increases risk to near-term liquidity and can complicate cash planning for dividends, buybacks or debt service during slower revenue periods.

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 multiple streams. The primary source of income comes from its subscription-based services, where clients pay for access to its extensive research reports, data, and analytical tools. This includes subscriptions for institutional clients, financial advisors, and retail investors. Additionally, Morningstar earns revenue from its investment management services, where it charges fees for managing investment portfolios. The company also benefits from licensing its data and analytics to third parties, which provides another significant revenue stream. Strategic partnerships with financial institutions and asset managers further enhance its earnings, as these collaborations often lead to joint product offerings and expanded market reach.

Morningstar Financial Statement Overview

Summary

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

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: Neutral
• Last Price: 182.31
• 50DMA: Negative
• 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 Neutral. The current price of 182.31 is above the 20-day moving average (MA) of 167.75, below the 50-day MA of 194.60, and below the 200-day MA of 240.30, indicating a neutral trend. The MACD of -4.33 indicates Negative momentum. The RSI at 53.62 is Neutral, neither overbought nor oversold. The STOCH value of 96.97 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MORN.

Morningstar Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MSCI	76 Outperform	$41.56B	36.05	―	1.24%	9.02%	3.45%
VALU	73 Outperform	$340.29M	16.05	21.02%	3.31%	-3.75%	-4.34%
FDS	72 Outperform	$8.27B	14.18	28.83%	1.49%	5.88%	12.18%
MCO	71 Outperform	$82.32B	33.97	64.55%	0.73%	8.77%	13.62%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SPGI	67 Neutral	$132.66B	30.30	13.91%	0.73%	9.04%	21.35%
MORN	63 Neutral	$7.22B	20.56	26.35%	0.84%	7.76%	15.92%

Morningstar Corporate Events

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.

Morningstar Announces 10% Increase in Quarterly Dividend

On December 5, 2025, Morningstar, Inc. announced an increase in its quarterly dividend to 50 cents per share, a 10% rise from the previous rate, payable on January 30, 2026. This decision reflects the company’s ongoing commitment to delivering value to its shareholders and indicates a positive outlook on its financial health and growth prospects.

The most recent analyst rating on (MORN) stock is a Buy with a $250.00 price target. To see the full list of analyst forecasts on Morningstar stock, see the MORN Stock Forecast page.