MSCI (MSCI) AI Stock Analysis

• Market Cap: $42.78B
• Dividend Yield: 1.2%
• Average Volume (3M): 627.59K
• Price to Earnings (P/E): 39.2
• Beta (1Y): 0.94
• Revenue Growth: 12.94%
• EPS Growth: -2.54%
• Country: US
• Employees: 6,132
• Sector: Financial
• Sector Strength: 81
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 14.05
• Shares Outstanding: 77,601,620
• 10 Day Avg. Volume: 721,395
• 30 Day Avg. Volume: 627,591
• PEG Ratio: 1.52
• Price to Book (P/B): N/A
• Price to Sales (P/S): 15.29
• Price to Cash Flow (P/CF): 25.40
• P/FCF Ratio: 25.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $645.25
• Price Target Upside: 15.93% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

MSCI demonstrates strong financial performance with robust profitability and cash flow, but negative equity poses a notable risk. Technical analysis suggests limited momentum, while the high P/E ratio indicates potential overvaluation. Positive earnings call insights and corporate events enhance the outlook slightly.

Positive Factors

Demand and Market Conditions

Conditions on the buy-side, which generates approximately 80% of total revenue at MSCI, are improving following underperformance marked by fund closures, restructurings, and consolidations.

Innovation and Growth

As a leading index franchise, MSCI is expected to continue to innovate and shift towards the next evolution of global investing.

Negative Factors

Client Budgets

If the market environment remains challenging and client budgets do not improve, there is a risk of lower demand for MSCI’s subscription-based products.

Revenue Growth

Near term deceleration in revenue growth is expected.

MSCI Business Overview & Revenue Model

Company Description

MSCI Inc., together with its subsidiaries, provides investment decision support tools for the clients to manage their investment processes worldwide. It operates through four segments: Index, Analytics, ESG and Climate, and All Other Private Assets. The Index segment provides indexes for use in various areas of the investment process, including indexed product creation, such as ETFs, mutual funds, annuities, futures, options, structured products, over-the-counter derivatives; performance benchmarking; portfolio construction and rebalancing; and asset allocation, as well as licenses GICS and GICS Direct. The Analytics segment offers risk management, performance attribution and portfolio management content, application, and service that provides an integrated view of risk and return, and an analysis of market, credit, liquidity, and counterparty risk across asset classes; managed services, including consolidation of client portfolio data from various sources, review and reconciliation of input data and results, and customized reporting; and HedgePlatform to measure, evaluate, and monitor the risk of hedge fund investments. The ESG and Climate segment provides products and services that help institutional investors understand how ESG factors impact the long-term risk and return of their portfolio and individual security-level investments; and data, ratings, research, and tools to help investors navigate increasing regulation. The All Other Private Assets segment includes real estate market and transaction data, benchmarks, return-analytics, climate assessments and market insights for funds, investors, and managers; business intelligence to real estate owners, managers, developers, and brokers; and offers investment decision support tools for private capital. It serves asset owners and managers, financial intermediaries, wealth managers, real estate professionals, and corporates. MSCI Inc. was incorporated in 1998 and is headquartered in New York, New York.

How the Company Makes Money

MSCI Inc. generates revenue primarily through its index, analytics, and ESG (Environmental, Social, and Governance) research products. The company's index segment earns money by licensing its indices to asset managers who use them to create mutual funds, ETFs, and other investment products. MSCI also charges subscription fees for its analytics and risk management tools, which help clients assess and manage investment risk. Additionally, the ESG segment contributes to revenue by providing research and ratings that help investors incorporate sustainability into their investment processes. Key partnerships with financial institutions and asset managers enhance MSCI's revenue through collaborative product development and distribution agreements.

MSCI Financial Statement Overview

Summary

MSCI shows strong financial performance with high profitability and efficient operations, as seen in robust revenue growth and profit margins. However, negative equity suggests high leverage, posing a risk to financial stability.

Income Statement

MSCI demonstrates robust financial performance with a consistent revenue growth trajectory over the years. The TTM data shows a gross profit margin of 78.9%, indicating strong cost management. The net profit margin of 38.8% reflects high profitability. Revenue growth rate of 12.9% (TTM vs. previous year) is impressive, alongside an EBIT margin of 53.7% and an EBITDA margin of 59.2%, showcasing excellent operational efficiency. However, the decline in net income from the previous year suggests potential areas for improvement.

Balance Sheet

The balance sheet highlights a significant challenge with negative stockholders' equity, indicating potential financial instability. The debt-to-equity ratio cannot be calculated accurately due to negative equity, posing a risk. Despite this, the company maintains high returns, with ROE being irrelevant due to negative equity. Equity ratio is also negative, suggesting high leverage and potential risk in the long term.

Cash Flow

MSCI shows strong cash flow management with a healthy operating cash flow of $1.50 billion in TTM. The free cash flow growth rate of 24.5% from the previous year indicates robust cash generation capabilities. The operating cash flow to net income ratio of 1.35 and free cash flow to net income ratio of 1.28 in TTM show effective cash conversion. However, significant financing cash outflows highlight potential challenges in managing debt or returning capital to shareholders.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.86B	2.53B	2.25B	2.04B	1.70B
	Gross Profit
2.34B	2.08B	1.84B	1.68B	1.40B
	EBIT
1.53B	1.38B	1.21B	1.07B	884.76M
	EBITDA
1.75B	1.71B	1.36B	1.15B	953.34M
	Net Income Common Stockholders
1.11B	1.15B	870.57M	725.98M	601.82M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
405.85M	457.81M	993.56M	1.42B	1.30B
	Total Assets
5.45B	5.52B	5.00B	5.51B	4.20B
	Total Debt
4.63B	4.63B	4.64B	4.31B	3.52B
	Net Debt
4.23B	4.17B	3.65B	2.89B	2.22B
	Total Liabilities
6.39B	6.26B	6.01B	5.67B	4.64B
	Stockholders Equity
-940.00M	-739.76M	-1.01B	-163.47M	-443.23M
Cash Flow		Free Cash Flow
1.47B	1.15B	1.02B	883.27M	760.13M
	Operating Cash Flow
1.50B	1.24B	1.10B	936.07M	811.11M
	Investing Cash Flow
-144.25M	-819.38M	-79.33M	-1.04B	-241.79M
	Financing Cash Flow
-1.40B	-953.93M	-1.43B	229.50M	-779.04M

MSCI Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 556.57
• 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 MSCI, the sentiment is Neutral. The current price of 556.57 is above the 20-day moving average (MA) of 551.73, below the 50-day MA of 563.23, and below the 200-day MA of 569.59, indicating a neutral trend. The MACD of -7.24 indicates Negative momentum. The RSI at 51.55 is Neutral, neither overbought nor oversold. The STOCH value of 74.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MSCI.

MSCI Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCO	76 Outperform	$78.73B	38.85	59.80%	0.81%	19.81%	28.97%
FDS	75 Outperform	$16.43B	30.77	28.12%	0.98%	4.66%	11.15%
SPGI	74 Outperform	$145.98B	37.66	11.44%	0.78%	13.68%	49.90%
MSCI	73 Outperform	$42.78B	39.24	-117.99%	1.20%	12.94%	-2.54%
NDAQ	73 Outperform	$41.86B	37.74	10.15%	1.34%	21.96%	-8.37%
MORN	70 Outperform	$12.10B	32.97	25.11%	0.59%	11.60%	161.17%
Sector *	63 Neutral	$12.77B	9.36	8.63%	84.77%	13.85%	-3.90%

MSCI Corporate Events

Wayne Edmunds Retires from MSCI Board of Directors

On February 23, 2025, Wayne Edmunds announced his retirement from MSCI Inc.’s Board of Directors, where he has served since 2015. His departure is not due to any disagreements with the company’s management or policies. Following his retirement, the Board plans to reduce its size from thirteen to twelve members.

MSCI Aligns CEO Compensation with Shareholder Value

On January 27, 2025, MSCI Inc. approved a one-time premium-priced stock option award for CEO Henry A. Fernandez, valued at $15 million and designed to align with long-term shareholder value creation through rigorous performance-based hurdles. The award, reflecting MSCI’s commitment to a robust ‘owner-operator’ culture, underscores Fernandez’s track record of substantial shareholder return, with a 23.5% CAGR since 2007, significantly outperforming the S&P 500. Additionally, the company increased Fernandez’s annual long-term equity incentive compensation from $11.6 million to $14.6 million, further aligning executive compensation with shareholder interests. This move is part of MSCI’s broader strategy to incentivize exceptional shareholder returns while adhering to competitive market standards and maintaining a pay-for-performance philosophy.