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Morningstar (MORN)
NASDAQ:MORN
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Morningstar (MORN) AI Stock Analysis

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MORN

Morningstar

(NASDAQ:MORN)

Rating:66Neutral
Price Target:
$283.00
▲(8.72% Upside)
Morningstar's overall stock score is driven by strong financial performance and positive corporate developments. However, technical analysis indicates bearish momentum, and the valuation suggests a premium price, which tempers the overall score.
Positive Factors
Financial Performance
There is upside in margin expansion and EPS growth opportunity and its crown-jewel assets such as PitchBook.
Growth Strategy
PitchBook is expected to continue growing by focusing on its core investor clientele, adding new datasets and capabilities, and through an eventual macro recovery.
Market Expansion
Management's PitchBook TAM assumptions have increased sizably from $6.5B to $11.1B due to expanding data coverage and use cases across client types and private market growth.
Negative Factors
Challenging Macro Environment
Management noted facing a more challenging macro in the US, particularly in the corporate client segment.
Data and Analytics Growth
Data and Analytics slowing growth attributed to a variety of factors.
Platform Deceleration
Management re-discussed the drivers of the deceleration in MORN Direct Platform, which has been a focus in several Q&A responses.

Morningstar (MORN) vs. SPDR S&P 500 ETF (SPY)

Morningstar Business Overview & Revenue Model

Company DescriptionMorningstar, 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 MoneyMorningstar generates revenue through several key streams. The primary source of revenue comes from its Research and Data segment, which includes subscriptions to its investment research platforms and analytics tools used by individual investors, financial advisors, and institutional clients. Additionally, the company earns fees from its Investment Management segment, where it manages assets on behalf of clients, including mutual funds and separate accounts. Another significant revenue stream arises from Morningstar Direct, a software platform that provides investment management and research data to institutional investors. Furthermore, Morningstar benefits from partnerships with various financial institutions, enhancing its distribution channels and client base. The combination of subscription fees, asset management fees, and data licensing contributes to its overall revenue model.

Morningstar Financial Statement Overview

Summary
Morningstar showcases a well-rounded financial performance with strong revenue and profit growth, efficient cost management, and robust cash flow generation. The balance sheet is stable with moderate leverage and a solid equity base. Despite a decrease in free cash flow, it remains strong, supporting ongoing operations and investments.
Income Statement
85
Very Positive
Morningstar's financial performance is strong, with consistent revenue growth and impressive profitability. The TTM gross profit margin stands at 60.93%, showcasing efficient cost management. The net profit margin for the TTM is robust at 17.22%, reflecting solid bottom-line performance. Revenue growth has been steady, with a TTM increase of 3.18% compared to the previous year, indicating a healthy upward trajectory. EBIT and EBITDA margins are strong, indicating good operational efficiency.
Balance Sheet
78
Positive
The balance sheet shows a stable financial position with a debt-to-equity ratio of 0.64, indicating moderate leverage. The return on equity for the TTM is 25.03%, highlighting effective utilization of shareholder funds. The equity ratio is 44.47%, reflecting a healthy equity buffer. Overall, Morningstar maintains a solid balance between debt and equity, with potential room for further leverage if needed.
Cash Flow
82
Very Positive
Morningstar exhibits a strong cash flow position, with a free cash flow of $389.8 million in the TTM. The operating cash flow to net income ratio is 1.32, indicating effective cash generation relative to net income. Free cash flow has declined compared to the previous year, with a decrease of 13.16%, but remains positive and substantial. The company demonstrates effective cash management, ensuring sufficient liquidity for operations and investments.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.35B2.28B2.04B1.87B1.70B1.39B
Gross Profit1.43B1.38B1.20B1.09B1.00B833.10M
EBITDA732.70M714.20M419.70M323.70M417.00M433.90M
Net Income404.10M369.90M141.10M70.50M193.30M223.60M
Balance Sheet
Total Assets3.63B3.55B3.40B3.47B2.86B2.70B
Cash, Cash Equivalents and Short-Term Investments541.60M551.00M389.00M414.60M546.10M464.20M
Total Debt1.03B904.00M1.16B1.32B531.50M626.70M
Total Liabilities2.02B1.93B2.08B2.27B1.45B1.42B
Stockholders Equity1.61B1.62B1.33B1.21B1.42B1.27B
Cash Flow
Free Cash Flow389.80M448.90M197.30M168.30M348.10M307.60M
Operating Cash Flow535.30M591.60M316.40M297.80M449.90M384.30M
Investing Cash Flow-56.40M-21.30M-81.90M-799.30M-167.70M-123.80M
Financing Cash Flow-391.90M-384.40M-278.40M415.10M-211.80M-182.20M

Morningstar Technical Analysis

Technical Analysis Sentiment
Negative
Last Price260.29
Price Trends
50DMA
283.36
Negative
100DMA
288.29
Negative
200DMA
306.96
Negative
Market Momentum
MACD
-6.29
Negative
RSI
37.92
Neutral
STOCH
57.78
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 260.29 is below the 20-day moving average (MA) of 263.11, below the 50-day MA of 283.36, and below the 200-day MA of 306.96, indicating a bearish trend. The MACD of -6.29 indicates Negative momentum. The RSI at 37.92 is Neutral, neither overbought nor oversold. The STOCH value of 57.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MORN.

Morningstar Risk Analysis

Morningstar disclosed 24 risk factors in its most recent earnings report. Morningstar reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Morningstar Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$168.43B42.7911.76%0.69%10.72%23.30%
73
Outperform
$44.21B38.01-117.99%1.23%10.48%0.98%
72
Outperform
$351.22M17.2221.72%3.22%-6.42%8.90%
70
Outperform
$14.47B27.5526.35%1.11%5.07%4.19%
68
Neutral
$17.69B11.8210.30%3.73%9.66%0.42%
66
Neutral
$10.98B27.8026.51%0.68%8.23%64.35%
63
Neutral
$4.08B-1.16%2.19%1.97%-14.06%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MORN
Morningstar
260.29
-48.13
-15.61%
FDS
Factset Research
380.00
-29.44
-7.19%
SPGI
S&P Global
552.32
50.65
10.10%
MSCI
MSCI
571.43
-1.73
-0.30%
VALU
Value Line
38.80
-0.83
-2.09%
DNB
Dun & Bradstreet Holdings
9.15
-2.62
-22.26%

Morningstar Corporate Events

Business Operations and Strategy
Morningstar Releases Investor Q&A Report on Operations
Positive
Aug 5, 2025

Morningstar released an Investor Q&A report addressing questions received through July 15, 2025, detailing aspects of their operations and revenue models. The report highlights the company’s integrated approach to client engagement, cross-selling strategies, and revenue composition, emphasizing recurring revenue in structured finance and fundamental ratings. It also discusses the monetization of investment data, retention rates, and plans for Morningstar Medalist ratings for interval funds. The report outlines the proprietary nature of their data collection for fund ratings and notes the mature market status of their Morningstar Direct Platform, while also indicating potential growth through data and analytics enhancements.

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.

Financial Disclosures
Morningstar Reports Q2 2025 Financial Results
Positive
Jul 30, 2025

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.

Business Operations and StrategyFinancial Disclosures
Morningstar Expands Private Credit Capabilities Amid Growth Slowdown
Neutral
Jun 27, 2025

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.

Dividends
Morningstar Declares Quarterly Dividend for Shareholders
Positive
Jun 20, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 06, 2025