MSCI (MSCI) AI Stock Analysis

• Market Cap: $43.57B
• Dividend Yield: 1.26%
• Average Volume (3M): 472.63K
• Price to Earnings (P/E): 38.7
• Beta (1Y): 0.92
• Revenue Growth: 11.67%
• EPS Growth: -0.89%
• Country: US
• Employees: 6,184
• Sector: Financial
• Sector Strength: 75
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 4.00
• Shares Outstanding: 77,371,500
• 10 Day Avg. Volume: 389,071
• 30 Day Avg. Volume: 472,628
• PEG Ratio: 11.06
• Price to Book (P/B): -45.84
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 30.34
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 4.24
• Enterprise Value/Gross Profit: 20.33
• Enterprise Value/Ebitda: 6.67
• 1Y Price Target: $631.43
• Price Target Upside: 8.83% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 72 Outperform
• Price Target: $628.00 ▲(8.24%Upside)

MSCI's strong earnings call performance and robust technical indicators are offset by valuation concerns and balance sheet risks. The company's strategic initiatives and high profitability are positive, but leverage and high P/E ratio warrant caution.

Positive Factors

Market Position

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

Market Trends

Long term secular trends are favorable for MSCI, indicating a positive outlook for future growth.

Revenue Growth

MSCI's private asset segment grew revenue 5.2%, showcasing positive momentum in this area.

Negative Factors

Financial Outlook

The price objective was lowered to $560 due to lower index and analytics revenue amidst a tough selling environment.

Operational Headwinds

MSCI is facing near-term headwinds across their index, analytics, and sustainability/climate segments, impacting its performance.

Revenue Challenges

Near term deceleration in revenue growth is expected, posing a challenge for the company's financial performance.

MSCI Business Overview & Revenue Model

Company Description

MSCI Inc. is a leading provider of critical decision support tools and services for the global investment community. The company operates in the financial services sector, offering a range of products and services including indices, portfolio risk and performance analytics, and ESG (Environmental, Social, and Governance) research. MSCI's offerings are designed to help institutional investors manage their investment processes, enabling them to make more informed investment decisions.

How the Company Makes Money

MSCI generates revenue primarily through subscription-based and recurring licensing fees from its broad array of financial products and services. The company's key revenue streams include index licensing fees, which are derived from the use of MSCI indices for investment products such as ETFs and mutual funds; analytics products, which offer risk management and portfolio analysis tools to clients; and ESG and climate solutions, providing data and analysis on sustainable investing. Additionally, MSCI benefits from strategic partnerships and collaborations with financial institutions that enhance the distribution and utilization of its products globally.

MSCI Financial Statement Overview

Summary

MSCI shows strong financial performance with high profitability and robust cash flow generation. However, significant leverage challenges with negative stockholders' equity pose financial risks.

Income Statement

MSCI shows strong revenue growth with a solid TTM revenue of $2.92 billion, up from $2.85 billion annually, indicating a positive growth trajectory. The gross profit margin is robust at 80.6%, and the net profit margin stands at 39.1%, reflecting high profitability. Both EBIT and EBITDA margins are impressive at 53.7% and 59.5%, respectively, showcasing operational efficiency. However, the growth rate from previous periods shows a deceleration, which might be a concern if it continues.

Balance Sheet

The company faces significant leverage challenges, with a negative stockholders' equity of $958.57 million, leading to an unquantifiable debt-to-equity ratio. This suggests high financial risk and potential instability. Total liabilities exceed total assets, and the negative equity ratio indicates a reliance on debt financing. Despite these challenges, MSCI has a solid asset base of $5.34 billion, which supports its operational needs.

Cash Flow

MSCI demonstrates strong cash flow management with a TTM free cash flow of $1.44 billion, showing resilience and the ability to generate cash. The operating cash flow to net income ratio is healthy, indicating effective conversion of income to cash. However, the free cash flow growth rate is modest, suggesting limited expansion in cash generation capabilities. Financing activities are negative, reflecting potential debt repayments or shareholder distributions.

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
EBITDA	1.75B	1.71B	1.36B	1.15B	953.34M
Net Income	1.11B	1.15B	870.57M	725.98M	601.82M
Balance Sheet
Total Assets	5.45B	5.52B	5.00B	5.51B	4.20B
Cash, Cash Equivalents and Short-Term Investments	405.85M	457.81M	993.56M	1.42B	1.30B
Total Debt	4.63B	4.63B	4.64B	4.31B	3.52B
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: Positive
• Last Price: 580.18
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MSCI, the sentiment is Positive. The current price of 580.18 is above the 20-day moving average (MA) of 572.16, above the 50-day MA of 565.37, and above the 200-day MA of 575.85, indicating a bullish trend. The MACD of 3.50 indicates Positive momentum. The RSI at 56.59 is Neutral, neither overbought nor oversold. The STOCH value of 33.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MSCI.

MSCI Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NDAQ	83 Outperform	$50.77B	40.10	11.43%	1.22%	25.89%	16.37%
SPGI	80 Outperform	$160.18B	41.01	11.68%	0.73%	12.98%	42.72%
MORN	77 Outperform	$12.10B	32.16	25.68%	0.64%	10.11%	79.71%
MCO	76 Outperform	$89.10B	42.79	57.90%	0.75%	15.95%	26.38%
FDS	73 Outperform	$16.50B	31.51	26.35%	1.01%	5.07%	4.19%
MSCI	72 Outperform	$43.57B	38.72	-117.99%	1.26%	11.67%	-0.89%
Sector *	58 Neutral	HK$91.09B	5.21	-3.21%	5.20%	7.36%	-55.21%

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.