MSCI (MSCI) AI Stock Analysis

• Market Cap: $42.42B
• Dividend Yield: 1.25%
• Average Volume (3M): 839.37K
• Price to Earnings (P/E): 36.3
• Beta (1Y): 0.86
• Revenue Growth: 10.48%
• EPS Growth: 0.98%
• Country: US
• Employees: 6,184
• Sector: Financial
• Sector Strength: 67
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 4.17
• Shares Outstanding: 77,365,234
• 10 Day Avg. Volume: 1,125,079
• 30 Day Avg. Volume: 839,365
• PEG Ratio: -17.09
• Price to Book (P/B): -50.24
• Price to Sales (P/S): 16.54
• P/FCF Ratio: 32.17
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 16.41
• Enterprise Value/Gross Profit: 19.96
• Enterprise Value/Ebitda: 27.52
• 1Y Price Target: $642.89
• Price Target Upside: 17.86% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 70 Outperform
• Price Target: $629.00 ▲(15.31% Upside)

MSCI's overall stock score is supported by strong financial performance, highlighted by robust revenue growth and profitability. Despite high leverage risks, efficient cash flow management bolsters financial health. Earnings call insights further enhance the outlook with positive sentiment and growth potential. However, technical indicators suggest caution, and the high P/E ratio raises valuation concerns.

Positive Factors

Growth Opportunities

Analysts believe MSCI has the ability to reaccelerate organic growth, with upside opportunities from custom indexes, Climate, and Private Assets.

Long-term Growth

There is a long runway for continued above-peer revenue and EPS growth.

Market Trends

Rising markets should be supportive for clients, and management is seeing a pickup in the pipeline.

Negative Factors

Financial Performance

Forward looking KPIs were worse than expected, with net new subscription sales missing expectations due to lower sales and higher cancellations.

Price Target Reduction

The price objective was lowered to $560 driven by lower index and analytics revenue given the tough selling environment.

Revenue Deceleration

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 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 demonstrates strong revenue growth and high profitability margins, indicating robust demand and efficient cost management. However, the balance sheet reveals high leverage and negative equity, presenting financial risks despite stable cash flow management.

Income Statement

MSCI demonstrates strong revenue growth with a TTM revenue increase of 4.6% over the previous year, reflecting robust demand. The company maintains high profitability margins with a Gross Profit Margin of 82.2% and a Net Profit Margin of 39.5% in the TTM, indicating efficient cost management and a strong competitive position. However, the EBIT and EBITDA margins show slight compression, which may warrant monitoring.

Balance Sheet

MSCI's balance sheet shows a high Debt-to-Equity ratio due to negative stockholders' equity, which presents a leverage risk. The Return on Equity is not meaningful given the negative equity, and the equity ratio is also negative, highlighting financial risk. Despite these concerns, the company maintains substantial assets and cash reserves that provide some stability.

Cash Flow

MSCI has shown consistent free cash flow generation, with a TTM Free Cash Flow of $1.45 billion, and Operating Cash Flow exceeds net income, suggesting efficient cash conversion. The Free Cash Flow growth rate over the past year is stable, indicating strong cash flow management despite high financing cash outflows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.99B	2.86B	2.53B	2.25B	2.04B	1.70B
Gross Profit	2.45B	2.34B	2.08B	1.84B	1.68B	1.40B
EBITDA	1.78B	1.75B	1.71B	1.36B	1.15B	953.34M
Net Income	1.18B	1.11B	1.15B	870.57M	725.98M	601.82M
Balance Sheet
Total Assets	5.37B	5.45B	5.52B	5.00B	5.51B	4.20B
Cash, Cash Equivalents and Short-Term Investments	347.32M	405.85M	457.81M	993.56M	1.42B	1.30B
Total Debt	4.63B	4.63B	4.63B	4.64B	4.31B	3.52B
Total Liabilities	6.26B	6.39B	6.26B	6.01B	5.67B	4.64B
Stockholders Equity	-886.21M	-940.00M	-739.76M	-1.01B	-163.47M	-443.23M
Cash Flow
Free Cash Flow	1.45B	1.47B	1.15B	1.02B	883.27M	760.13M
Operating Cash Flow	1.49B	1.50B	1.24B	1.10B	936.07M	811.11M
Investing Cash Flow	-132.26M	-144.25M	-819.38M	-79.33M	-1.04B	-241.79M
Financing Cash Flow	-1.47B	-1.40B	-953.93M	-1.43B	229.50M	-779.04M

MSCI Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 545.49
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 545.49 is below the 20-day moving average (MA) of 558.30, below the 50-day MA of 562.89, and below the 200-day MA of 573.18, indicating a bearish trend. The MACD of -3.51 indicates Positive momentum. The RSI at 42.86 is Neutral, neither overbought nor oversold. The STOCH value of 30.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MSCI.

MSCI Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SPGI	81 Outperform	$171.89B	43.27	11.76%	0.67%	10.72%	23.30%
MCO	79 Outperform	$92.84B	43.98	55.18%	0.70%	11.47%	16.14%
NDAQ	78 Outperform	$55.28B	37.02	13.28%	1.03%	23.55%	49.91%
FDS	73 Outperform	$14.65B	27.97	26.35%	1.09%	5.07%	4.19%
MSCI	70 Outperform	$42.42B	36.33	-117.99%	1.25%	10.48%	0.98%
Sector *	67 Neutral	$17.02B	11.60	9.79%	3.95%	10.61%	2.06%
MORN	66 Neutral	$11.05B	27.88	26.51%	0.68%	8.23%	64.35%

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.